IMF Director: Global Economy at Risk of Slowing Growth

International Monetary Fund (IMF) director Kristalina Gorgieva warned on Thursday that the world is in danger of falling into a low growth path and high debt, leaving governments with fewer resources to improve opportunities for their people and address climate change as well as other challenges.

The result is a growing dissatisfaction among people, Gorgieva said at a press conference during the annual meetings of the International Monetary Fund and the World Bank in Washington.

The meetings hang over the impending U.S. presidential election on Nov. 5, raising the prospect that Americans affected by high inflation during Democratic President Joe Biden’s administration will return Republican candidate Donald Trump to the White House, heralding the beginning of an era of protectionist trade policies and trillions of dollars in new U.S. debt.

Georgieva said dissatisfaction is not limited to the U.S., although the global economy has shown some toughness in the face of threats from wars, weak demand in China, and the late fallout of hardline monetary policy.

Referring to the scenario of taming high inflation without entering a painful recession or major job losses, Georgieva said, “For most of the world, a smooth landing is on the horizon, but people are not satisfied with the economic future... Everyone I asked here, how is your economy? The answer is good And how are your people? The answer is not good Households continue to suffer from rising prices, and global growth is weak.”

The International Monetary Fund on Tuesday released a new economic forecast showing that global GDP growth will fall slightly by 2029 to 3.1% from 3.2% this year, well below its 2000-2019 average of 3.8%, as current U.S. strength ebside.

Other concerns about the worsening of the war in the Middle East also prevailed in the meetings of the International Monetary Fund and the World Bank.

Gorgieva stated that the escalation of the conflict could increase the spillover effects on the region’s economies, including Egypt, which reached an agreement with the fund earlier this year to increase its loan program from $3 to $8 billion.