As IMF Managing Director Kristalina Georgieva was noting, while significant progress has already been achieved in the revival of the world economy, quite many problems remain on the agenda, including high debt and slow growth.
Georgieva questioned excessive government borrowing, pointing out that the biggest challenge we face is low growth and high debt. She acknowledged that major central banks have acted to curb inflation, but those actions haven’t touched all economies equally. Many are still facing high prices, which have heightened social and political unrest. “The cost increases are still affecting the people, and most feel relatively worse and more frustrated,” she said.
The remarks are made in advance of the IMF and World Bank Group’s annual meetings, which are set to take place in Washington, D.C., from October 13–18.
Finance ministers and central bank governors from around the world are to meet for two days of talks on global economic outlook, poverty reduction, and the green transition.
Growth drivers such as international trade is under new challenges from an increase in the degree of protectionism. The punitive tariffs recently levied by the United States and the European Union against China have been a step primarily due to concerns over practices regarding trade.
Georgieva said: “We are witnessing pressures from citizens who felt globalization was not working for them,” reflecting concerns sharpened by the pandemic and geopolitical tensions, particularly Russia’s activities in Ukraine.
In these regards, she reiterated that the IMF is firmly opposed to protectionism often unproductive both in the imposing and in the targeted economies, she said. “Tariffs are generally agreed on to the businesses and consumers of the country that applies them,” she added.
Her broader concerns include escalations in geopolitical tensions, especially in the Middle East, that would destabilize regional economies further, thus affecting global oil and gas markets.