Slower economic growth raising risk of hunger, poverty: IMF
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Salma Hossein
- . April 7, 2023
- . Update: April 8, 2023 1:37 am
Kristalina Georgieva, the head of the International Monetary Fund (IMF), has raised serious concerns over persistently high-interest rates, recent bank collapses in the US and Europe, and worsening geopolitical divisions putting global financial stability at greater risk.
The world economy is expected to lock a growth of less than 3% this year, compared to 3.4% in 2022, she warned, adding the growth will likely remain roughly 3% for the coming five years.
Georgieva called it “our lowest medium-term growth forecast since 1990”, highlighting the difficulties low-income nations will particularly face while catching up.
The forecasts have arrived in advance of next week’s meetings of the IMF and the World Bank, where policymakers are expected to hold serious discussions on the global economy’s most pressing problems.
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The annual event will take place against a backdrop of central banks across the globe raising interest rates to check inflation and a continuing debt crisis preventing emerging economies from growing by pushing debt burdens higher.
Low-income countries are prone to a double shock from high borrowing costs and a fall in demand for their exports, triggering much higher levels of hunger and poverty, Georgieva said.
She urged wealthier IMF members to put in more efforts to provide support, as roughly 15% of low-income countries are already experiencing considerable debt distress and an extra 45% are approaching the dangerous line.
The coronavirus pandemic has killed more than 6.5 million people globally, severely affected global supply chains, and worsened food insecurity globally.
The IMF head said countries have so far been “resilient climbers” out of the virus outbreak. But the dangerous period isn’t over yet as advanced economies fight high inflation and poorer countries stay in debt distress, and the EU, the US and several others rethink their trade ties with China, exacerbating fears of instability.
