The global economy is showing greater resilience than expected with growth forecast to remain steady at 3.2 percent this year and next, though key reforms are needed to unlock higher long-term potential, said International Monetary Fund (IMF) Managing Director Kristalina Georgieva on Thursday.
In an exclusive interview with China Global Television Network, Georgieva said that while the current figures reflect encouraging stability amid global uncertainties, they still fall short of pre-pandemic averages.
"We are projecting 3.2 percent growth this year, 3.2 percent growth globally next year. That is quite impressing given the major transformation forces in play from geopolitics to technology, to the demography, and given the trade tensions that have impacted the year. But with 3.2 percent and very high levels of debt in many countries, this is better than we feared, but less than we need, and less than historically growth has been prior to COVID. The average growth rate prior to COVID was 3.7 percent. So 3.2 is disappointing," she said.
Despite the headwinds, she pointed to the gradual building of structural factors and policy foundations in several developing countries as key sources of resilience.
"First, over the last decades, most countries, especially emerging market economies, have done very well to build good institutions, to have in place strong policy frameworks, and that helps in this time of very high uncertainty. Secondly, most countries, including China, have gotten the government out of economic activity and led the private sector in. The private sector is more adaptable, especially again, in this time of rapid change. Three, the trade problems we started the year with in April, have proven to be not so dramatic," said the IMF director.
As the U.S. Federal Reserve (Fed) convenes for its year-end meeting amid expectations of rate cuts, Georgieva said the IMF is paying close attention as it looks for more signs of positive momentum in the global economy.
"What is important is that we very carefully monitor policy developments that have systemic significance. And as you refer to the Fed, of course, we monitor decisions of the Fed. Right now, what we see is the Fed is easing interest rates, and the dollar has weakened a little bit. This is good for emerging market economies. It makes their currencies more competitive, stronger. And it is also a source of more access to financial resources for emerging markets," she said.
IMF chief highlights "better than expected" 3.2 pct global growth forecast, urges reforms
IMF chief highlights "better than expected" 3.2 pct global growth forecast, urges reforms
IMF chief highlights "better than expected" 3.2 pct global growth forecast, urges reforms
