Washington, Oct 7: Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva said there is a “fundamental shift” in the global economy, urging countries to bring down inflation, put in place responsible fiscal policy, and jointly support the emerging market and developing economies.
The global economy is moving “from a world of relative predictability, with a rules-based framework for international economic cooperation, low interest rates, and low inflation… to a world with more fragility, greater uncertainty, higher economic volatility, geopolitical confrontations, and more frequent and devastating natural disasters”, Georgieva said in a curtain raiser speech ahead of the 2022 Annual Meetings of the IMF and the World Bank scheduled next week.
Stressing the urgency to stabilise the economy, she noted that global outlook has darkened by multiple shocks, among them a war, and inflation has become more persistent, reports Xinhua news agency.
The IMF has downgraded its growth projections already three times since October last year, to only 3.2 per cent for 2022 and 2.9 per cent for 2023, the IMF chief said, adding that the global institution will downgrade growth for next year in its updated World Economic Outlook next week.
“We will flag that the risks of recession are rising,” she noted.
The IMF estimates that countries accounting for about one-third of the world economy will experience at least two consecutive quarters of contraction this or next year.