WASHINGTON, Feb 3 — International Monetary Fund (IMF) managing director Kristalina Georgieva said that although the IMF raised the global growth forecast, there is still a need “to be mindful of risks,” reported Xinhua.
At a media roundtable at IMF headquarters in Washington DC on Thursday (February 1), she said with conflicts still going on between Russia and Ukraine, and Israel and Hamas, the complex geopolitical situation still brings uncertainties to the global economic outlook.
The IMF upgraded the global growth forecast to 3.1 per cent in 2024, 0.2 percentage point higher than the projection in October 2023.
On the shipping disruptions in the Middle East, Georgieva said that in January, cargo passing to the Suez Canal dropped by 43 per cent from a year earlier, dealing a blow to the economy of relevant economies.
On the monetary policy, she mentioned the risk of premature loosening as well as the risk of maintaining higher interest rates for an extended period.
For the United States (US), the risk of keeping interest rates higher for longer than necessary is not just a risk for the US economy, but for the global economy.
“When other countries especially many emerging market economies that have brought inflation down to target already move to lower interest rates, if the US continues to be higher, that could impact exchange rates and it can impact other countries in a somewhat negative way,” Georgieva said.
On the Chinese economy, she told Xinhua that “the Chinese economy performed in 2023 slightly above expectations.”
Looking ahead, decisively addressing the challenges, including the stress in the property sector, and managing local government debt is crucial for sustaining China’s economic momentum.
Georgieva added that some actions have already been taken by the Chinese government in the property sector.
China’s commitment to the green economy is evident in notable decisions, particularly in sectors like electric vehicles.
— Bernama
