The director general of the International Monetary Fund (IMF), Kristalina Georgieva, stated today that the world economy has resisted crises better than expected, but warned that low-income countries had results below expectations.
“Today the world economy is better than we feared a year ago, growth is maintaining itself, inflation is falling and the expectation of overcoming this stage of high inflation without recession, the so-called ‘soft landing’, is also gone translate into better conditions for low-income countries”, Georgieva pointed out.
However, he added, the impact of the pandemic and other shocks, such as the war in Ukraine, “is felt most deeply” in poor countries.
“Our analysis shows that the fear that shocks generate in advanced economies and emerging market economies is lower than we feared, but the fear in low-income countries is greater than we expected,” he explained.
Georgieva today joined World Bank President Ajay Banga at a forum in Washington to consider what low-income countries can do to foster macroeconomic stability, promote sustainable and inclusive growth and unlock progress towards development goals sustainable.
According to Georgieva, the Gross Domestic Product (GDP) of low-income countries is currently 10% below what was projected before the pandemic and most have “high levels of debt” that consume “13% of GDP”.
“What particularly worries me is that, given that growth is slow, its chances of recovery worsen,” said Georgieva.
The president of the World Bank said that, for these countries, paying the debt means postponing improvements in “health and education”, for example.
The IMF and the World Bank will hold their spring meetings in the week of April 15, at which the challenges of low-income countries will be one of the central themes.
