IMF Managing Director Kristalina Georgieva raised concerns on Thursday regarding the challenges posed by high debt levels and sluggish growth rates, emphasizing that these factors continue to hinder the global economy’s progress.
Despite acknowledging advancements in the economic recovery on a global scale, Georgieva cautioned that governments’ reliance on borrowing coupled with lackluster growth could exacerbate the difficulties in servicing existing debt obligations.
Georgieva stressed that while major central banks have made significant strides in curbing inflation, disparities persist among various economies, leading to ongoing struggles with elevated price levels which contribute to social and political unrest in affected regions.
As finance ministers and central bank governors prepare to convene in Washington DC for the annual 2024 meetings of the IMF and the World Bank Group, Georgieva highlighted the diminishing role of international trade as a primary growth driver, attributing this shift to the proliferation of protectionist policies adopted by several economies.
She pointed to recent punitive tariffs imposed by the U.S. and the European Union on China as examples of escalating trade tensions.
Georgieva also underscored wider geopolitical tensions, particularly the escalating conflicts in the Middle East, as a significant risk to global financial stability. She cautioned against retaliatory trade measures, emphasizing the potential negative repercussions on both the implementers and the intended targets, urging a thorough evaluation of costs and benefits before resorting to such actions.
