For the world economy, spring yet to come: IMF Chief

International Monetary Fund Chief Kristalina Georgieva has said that 2023 would be another difficult year, with global growth slowing to below three percent as a result of the pandemic's residual effects, the conflict in Ukraine and monetary tightening.  Even with a better outlook for 2024, global growth will remain well below its historic average of 3.8 percent as scarring from the pandemic, the war in Ukraine, and monetary tightening weigh on economic activity, she said. Addressing the  China Development Forum on Sunday, she opined that even with a more optimistic outlook for 2024, global growth will still be much below the historical average of 3.8 Percent and the overall outlook will remain poor. She added, policymakers in advanced economies had responded decisively to financial stability risks in the wake of bank collapses but even so vigilance was needed. Georgieva cationed, for the world economy, however, spring is yet to come.

Fortunately, the news on the world economy is not all bad. We can see some ‘green shoots’, including in China, she said and stated that China's economy is seeing a strong rebound  and the IMF’s January forecast puts GDP growth at 5.2 percent this year—a sizeable increase of more than 2 percentage points from the 2022 rate. IMF research shows that productivity-enhancing reforms in China could lift real GDP by as much as 2.5 percent by 2027, she said.