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National security concerns are driving some of the world’s major players to pursue domestically focused industrial and protectionist policies, she said, in an implicit criticism of the US-China geopolitical rivalry.
The International Monetary Fund warned that wars, trade tensions, high debt, and low growth threaten to prolong a lackluster economic era and leave nations without the resources to reduce poverty and confront climate change.
Higher consumer prices globally, conflict in the Middle East and Europe, and “far from good enough” medium-term growth prospects are reasons to be cautious despite an expected economic soft-landing, Managing Director Kristalina Georgieva said in a speech prepared for delivery Thursday in Washington.
At the same time, national security concerns are driving some of the world’s major players to pursue domestically focused industrial and protectionist policies, she said, in an implicit criticism of the US-China geopolitical rivalry.
The ratcheting up of trade barriers is like pouring cold water on an already-lukewarm world economy, Georgieva said, additg that The clashes come at a time when forecasts point to an unforgiving combination of low growth and high debt — a difficult future.
The fund warned this week that global public debt is set to reach USD100 trillion, or 93% of global gross domestic product, by the end of this year, driven by the US and China.
The IMF also sees economic growth being less than what’s needed for countries to create jobs, service significant debt loads and address huge investment needs, including the transition to clean energy.
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Georgieva spoke as finance ministers and central bank leaders from almost 200 nations prepare to converge on Washington next week for the lender’s annual meetings, along with its sister institution, the World Bank. The IMF will release an update to its World Economic Outlook shortly. It forecast in July 3.2% global growth this year and 3.3% next year.
