The head of the IMF: Uncertainty in the economy is a new normality. “Fasten the belts”

The global economy turned out to be more resistant to sudden shocks than it was afraid, but you have to get used to the fact that uncertainty is new normality – warned on Wednesday the executive director of the International Monetary Fund Kristalin Georgiew.

– Fasten the belts: uncertainty is new normal and stay with us for longer – said Georgiewa in a speech delivered in the Washington Think Tank Milken Institute. It preceded the annual meeting of finance ministers and heads of central banks of the IMF member states, which will also take place next week in Washington.

Georgiewa estimated that the global economy is in a better state than everyone was afraid, but “worse than we need”. She pointed out that half a year ago, experts expected that as a result of duties introduced by President Donald Trump, the United States would fall into recession, and the effects of this would spill to the rest of the world, while this did not happen.

– We only anticipate a small slowdown in global economic growth in the current and next year. All signs indicate that the global economy has generally endured serious tensions caused by many shocks – The General Director of the IMF said.

In its last forecast, published in July, the IMF predicted that global economic growth this year would be 3.0 percent, and in the next 3.1 percent, which means only a small slowdown in growth rate compared to 3.3 percent. In 2024, new forecasts will be published on Tuesday.

As Georgiev explained, There are four main reasons for this resistance of the world economy: better economic foundations, especially in emerging economies; Private sector's ability to adapt; That American duties turned out to be lower than originally afraid; favorable financial conditions.

– However, before everyone breathe a sigh of relief, please pay attention to the following issue: global immunity has not yet been fully tested. There are disturbing signals that this test may occur. Just look at the growing global demand for gold. (…) As for the duties, the full effect has not yet revealed – warned Georgiev.

The head of the IMF called countries to permanently increase economic growth by stimulating the performance of the private sector, consolidate budget expenditure and solve the problem of excessive inequality, which will allow them to rebuild safety buffers and prepare for another crisis. She noticed that by 2029 the global public debt would exceed 100 percent. GDP.

Georgiewa drew attention to the growing frustration of societies caused by the economic status quo in some countries. – Many people, especially young people, in many places express their disappointment on the streets: from Lima to a discount, from Paris to Nairobi and from Katmandu to Jakarta, everyone demands better opportunities – she noted. (PAP)

BJN/ AP/