West News Wire: The global economy is anticipated to grow by less than 3% this year, down from 3.4 percent last year, raising the risk of hunger and poverty internationally, according to the head of the International Monetary Fund (IMF).
Kristalina Georgieva stated on Thursday that growth will remain around 3% for the next five years, calling it “our lowest medium-term growth forecast since 1990,” adding that it would be a “severe blow” to low-income countries’ ability to catch up.
“Poverty and hunger could worsen, a dangerous trend sparked by the COVID crisis,” she said.
Georgieva’s remarks come before of next week’s sessions of the IMF and its sister lending institution, the World Bank, where policymakers will gather to discuss the global economy’s most pressing issues.
The annual gathering will take place as central banks around the world continue to raise interest rates to tame persistent inflation and as a continuing debt crisis in emerging economies pushes debt burdens higher, preventing nations from growing.
Low-income countries are expected to suffer a double shock from high borrowing costs and a decline in demand for their exports, which could cause poverty and hunger to increase, Georgieva added.
“About 15 percent of low-income countries are already in debt distress an additional 45 percent are near it,” she added, calling on wealthier IMF members to do more to provide support.
The IMF head said persistently high interest rates, a series of bank failures in the US and Europe, and deepening geopolitical divisions are threatening global financial stability.
Georgieva said that countries have thus far been “resilient climbers” out of the coronavirus pandemic, which has killed almost 6.9 million people globally, disrupted global supply chains and exacerbated worldwide food insecurity.
However, there were still considerable concerns as advanced economies face the challenges of high inflation and poorer nations are burdened by debt, and the United States, the European Union and others are rethinking their trade relationships with China, adding to fears of instability.