International Monetary Fund (IMF) Chairperson Kristalina Georgieva says that 2023 will be another challenging period when global growth will slow to below 3% due to the pressure of the pandemic and the war in Ukraine on economic activity. This is reported by Reuters.
Ms. Georgieva says there are growing risks to global financial stability and called on governments to remain vigilant.
According to her, even with the best forecasts for 2024, global growth will remain well below the historical average of 3.8%, and the overall outlook remains weak.
The IMF, which predicted global growth of 2.9% in 2023, plans to publish new forecasts next month. Ms. Georgieva notes that policymakers in advanced economies have “responded decisively to financial stability risks” following the bank failures, but even so, they need to “remain vigilant.”
The Head of the IMF hopes that against this backdrop, China will be able to become a driving force for the global economy: “China’s strong economic recovery, with projected GDP growth of 5.2% in 2023, offers some hope for the global economy, as China is expected to account for about a third of global growth in 2023.”
According to IMF estimates, every 1 percentage point of GDP growth in China leads to 0.3 percentage points of growth in other Asian economies.
Ms. Georgieva calls on China’s political leadership to work to increase productivity and rebalance the economy away from investment and towards more durable consumption-based growth, including through market reforms and levelling the playing field between the private sector and state-owned enterprises.
Such reforms could increase real GDP by 2.5% by 2027 and by about 18% by 2037. She emphasises that rebalancing China’s economy would also help Beijing meet its climate goals, as a shift to consumption-based growth would cool energy demand, reduce emissions, and ease pressure on energy security. It could cut carbon dioxide emissions by 15% over the next 30 years, leading to a 4.5% drop in global emissions over the same period, she says.
Source: https://mind.ua/
