The world economy is exhibiting remarkable resilience, presenting a better-than-expected performance despite ongoing challenges, according to Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF).
In an interview released on Friday with China Media Group (CMG), Georgieva emphasized that the IMF conducted a thorough analysis of two key aspects of the data.
Firstly, consumer demand remains robust, and government spending has also displayed considerable resilience. Secondly, the IMF has examined growth trends in major economies.
“The world economy is remarkably resilient despite the hits from COVID-19, from the war in Ukraine, from the inflationary spike that led to higher interest rates. We are seeing a performance that is better than we expected it to be a year ago,” said Georgieva.
The IMF has also observed two important trends. Firstly, inflation rates, which surged last year, are now declining in many economies.
Secondly, the job market has shown relative stability, indicating that people are employed and have disposable income, further reinforcing growth prospects.
Despite the positive signs, the IMF chief cautioned that decision-makers worldwide still face significant challenges.
“We are poised for a soft landing, haven’t landed just yet, and they have to carefully calibrate based on data when to start cutting interest rates, by how much, and they cannot look at the other central banks for inspiration, because countries are now in very different places,” said Georgieva.
Georgieva further added that “For fiscal authorities, this is a very difficult moment. They have to rebuild buffers, because they spent and spent and spent in the previous years. At the same time, they need to support the green and digital transformation of their economies.”
The world economic growth is still weak, way below what it was prior to the COVID-19, said Georgieva.
“So we are faced with a bit of relief. Economy is doing better. And at the same time, very challenging environment for decision makers,” said Georgieva.
