Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva said Thursday in Washington, D.C. that global economic growth will be weak for the next five years. File Photo by Bonnie Cash/UPI | License Photo
April 6 (UPI) -- International Monetary Fund Managing Director Kristalina Georgieva warned Thursday that the outlook for global economic growth will be weak, with just 3% growth in the next five years.
Georgieva said the IMF's World Economic Outlook, due out next week would show that global growth remains weak in both the near- and medium-term in comparison to historical trends.
"We project global growth to remain around 3% over the next five years --our lowest medium-term growth forecast since 1990, and well below the average of 3.8% from the past two decades," Georgieva said in a speech Thursday in Washington, D.C.
Roughly 90% of advanced economies are projected by the IMF to see a decline in growth rates. Georgieva said after the height of the COVID pandemic, 2021 saw robust economic growth.
But she said the shock of the Russian invasion of Ukraine, inflation and a worldwide inflation and cost-of-living crisis cut economic growth.
She outlined a host of economic challenges, including 2022 global economic growth dropping by nearly half - to 3.4% from 6.1%. Georgieva said China and India are expected to account for half of global economic growth in 2023.
But she said economic activity in the United States and the eurozone is slowing, due in part to rising interest rates.
Georgieva said world poverty and hunger could grow.
"With rising geopolitical tensions and still-high inflation, a robust recovery remains elusive. This harms the prospects of everyone, especially for the most vulnerable people and countries," Georgieva said.
In January the IMF warned that a third of the world will be in recession in 2023.
Despite the grim economic outlook, Georgieva said action can be taken with three priorities that could brighten world economic prospects.
She said policymakers should continue to fight inflation and safeguard financial stability.
Improving medium-term growth prospects is also important and that can be accomplished, she said, by structural reforms, accelerating the digital revolution, improving business environments and boosting human capital and inclusion.
"Just closing the gap in women's labor force participation could increase economic output by an average of 35% in countries with greater gender inequality," Georgieva said.
The IMF director also urged continuing efforts to foster solidarity to reduce global economic disparities. She said that is precisely what the IMF exists to do through mechanisms like debt restructuring.