The global economy is heading for the weakest period of growth since 1990 as higher interest rates set by the world’s top central banks drive up borrowing costs for households and businesses.
That’s the warning from the Managing Director of the International Monetary Fund, IMF, Kristalina Georgieva.
Ms. Georgieva says the sharp slowdown in the world economy last year after the aftershocks of the COVID pandemic and the Russian invasion of Ukraine would continue in 2023 and risks persisting for the next five years.
Here’s Robian Williams with the details:
In a curtain raiser speech before the IMF’s spring meetings in Washington DC next week, Georgieva said global growth would remain at about 3-percent over the next five years.
That’s the IMF’s lowest medium-term growth forecast since 1990.
In a downbeat assessment, Georgieva said economic activity was slowing across advanced economies in particular.
While there was some momentum from developing nations, including China and India, low-income countries were also suffering from higher borrowing costs and falling demand for their exports.
Ahead of the IMF publishing revised economic forecasts next week, Georgieva said global growth in 2022 had collapsed by almost half since the initial rebound from the Covid pandemic in 2021, sliding from 6-point-1-percent to 3-point-4-percent.
With high inflation, rising borrowing costs and mounting geopolitical tensions, she said global growth was on track to drop below 3-percent in 2023 and remain weak for years to come.
She says that as many as 90-percent of advanced economies would experience a decline in their growth rate this year, with activity in the US and the eurozone hit by higher interest rates.
Robian Williams for Nationwide News.
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