Director General of the International Monetary Fund (IMF), Kristalina Georgievawarns of increased risks to financial stability that there is a need to be more cautious after the recent events in the banking sector in developed economies.
Director, “uncertainties are extremely high” at the China Development Forum in Beijing this Sunday. economy “continues to remain weak” in the medium term.
“Because of the risks of geoeconomic fragmentation, this dividing the world into rival economic blocs, a ‘dangerous division’ that will leave everyone poorer and less secure,” he added.
“At a time of rising debt levels, the rapid transition from long-term low interest rates to the much higher rates needed to fight inflation is inevitable. stresses and vulnerabilitiesAs the recent events in the banking sector in some developed economies have shown,” he said.
The first alarms sounded when midsize bank Silicon Valley Bank collapsed earlier this month, leading to the acquisition of UBS by Credit Suisse. After several interventions by the financial authorities that failed to calm the nerves, The price of the Old Continent’s main banks fell again on Friday, led by Deutsche Bank. German Chancellor Olaf Scholz had to go out to deliver a calm message and said there was “no cause for concern” about the side.
“Even with better prospects for 2024, global growth will remain below the ten-year average of 3.8%,” Georgieva told the forum. IMF forecasts in January global growth will slow to 2.9% in 2023and then it would rise to 3.1% in 2024, according to Bloomberg.
He also stated that Chinese Will account for one-third of global growth by 2023“will give a welcome boost to the global economy.” Specifically, the IMF’s January forecast for China shows GDP growth at 5.2% this year, 2 percentage points higher than the 2022 rate, driven by the expected recovery in private consumption as the economy reopens and activity returns to normal.