IMF’s Georgieva weighs in on global economic trends. Like the Fed sees rates higher for longer.
- Current pace of global growth remains quite weak.
- Global growth is well below 3.8 pre-pandemic average
- Stronger demand for services, progress on inflation boosted chances for soft landing, but vigilance essential
- Fighting inflation remains top priority
- Warns that inflation will remain above target for some countries until 2025
- Medium-term growth prospects have weakened further.
- Winning fight against inflation requires interest rates to remain higher for longer.
- US, India are bright spots, but most advanced economies are slowing and China’s output below expectations.
- Estimates cumulative global output loss from successive shocks since 2020 amounts to $3.7 trillion.
- Sudden resurgence of inflation could lead to sharp tightening of financial conditions.
- Warns of significant risks on fiscal front in many countries, higher interest rates have increased debt burdens.