IMF Managing Director, Kristalina Georgieva, don warn say high debt levels and low growth rates dey pose big challenges to the global economy. Georgieva talk dis on Thursday, ahead of the annual meetings of the IMF and the World Bank Group in Washington DC.
She say while there been some progress in global economic recovery, governments too dey rely on borrowing, and dis anaemic growth dey make am hard to service the debt. “It’s not yet time to celebrate,” she tell CNBC. “When we look into the challenges ahead of us, the biggest one is low growth, high debt. This is where we can and must do better,” she add.
Georgieva also commend the work of major central banks in reducing inflation, but she note say some economies still dey struggle with high prices, which dey cause social and political unrest. “The impact of higher prices remains, and it is making many people in many countries feel worse off and angry,” she say.
The IMF forecast say global public debt go reach over $100 trillion by the end of this year, equivalent to 93 percent of global GDP. Dis debt levels dey rise fast, especially since the pandemic, and stabilizing dem go require big reductions in government spending.
Georgieva warn say international trade no go be the “engine of growth” again, due to the increase in protectionist policies among many economies. She mention the recent tariffs imposed by the U.S. and the European Union on China as examples of escalating trade tensions. She advise against retaliatory trade measures, saying dem could hurt both the implementers and the targets.
Georgieva also point to wider geopolitical tensions, especially the conflicts in the Middle East, as significant risks to global financial stability. She say these conflicts could destabilize regional economies and global oil and gas markets.
