The global economy faces its darkest outlook for more than 30 years as geopolitical tensions and sky-high inflation take their toll, according to the head of the International Monetary Fund.
In a speech ahead of the fund’s spring meetings next week, Kristalina Georgieva said output around the world would rise by an average of just 3 per cent a year for the next five years – the weakest projection since 1990 and well below the average annual growth of 3.8 per cent over the past two decades.
‘With rising geopolitical tensions and still-high inflation, a robust recovery remains elusive,’ said Georgieva. ‘This harms the prospects of everyone, especially for the most vulnerable people and vulnerable countries.’
‘With rising geopolitical tensions and still-high inflation, a robust recovery remains elusive,’ said the head of of the International Monetary Fund, Kristalina Georgieva
She said over the past three years the global economy has been ‘climbing one great hill after another only to discover there are many more to come’.
‘First was Covid, then Russia’s invasion of Ukraine, inflation and a cost of living crisis that hit everyone,’ she added.
‘But the path ahead, and especially the path back to robust growth, is rough and foggy, and the ropes that hold us together may be weaker now than they were.’
Bank failures in Switzerland and the US exposed frailties that raised the downside risks for the global economy, she said.
The fund predicts 90 per cent of advanced economies will see growth slow this year.
On war in Ukraine, Georgieva said: ‘It risks wiping out the peace dividend we have enjoyed for the past three decades, adding also to frictions in trade and finance.’
