WASHINGTON, OCT 25 – The International Monetary Fund (IMF) warned yesterday that the global economy risks being stuck in a low-growth path with high debt, while urging policymakers to act on debt and implement reforms that support growth.
“The global economy risks being stuck in a low-growth path with high debt, which means lower incomes and fewer jobs. It also means lower government revenues, so less investment to support families and address long-term challenges like climate change,” IMF Managing Director Kristalina Georgieva said in a press conference during the ongoing 2024 Annual Meeting of the IMF and the World Bank Group, reported Xinhua.
Georgieva called on policymakers to ensure inflation is back on target in all countries, stressing that the central bank’s main challenge now is to “solve the inflation problem without unnecessarily damaging the job market.”
Second, he said, “now is the time to act on the debt and deficit after years of fiscally necessary support.
“Now is the time to rebuild fiscal buffers in most countries. This can be done gradually, but it needs to start now.”
Thirdly and most importantly, he said, the country needs to implement reforms that support growth such as reducing bureaucracy and improving governance, while emphasizing that the IMF’s analysis shows that these reforms can increase output by 8 percent within four years in developing countries.
In its latest World Economic Outlook (WEO) released on Tuesday, the IMF maintained its forecast for global growth in 2024 at 3.2 percent, consistent with its projection in July.
Growth prospects for the next five years remain bleak, at 3.1 percent, the lowest in decades. – Named
