IMF says economic outlook ‘less bad’ than feared

The managing director of the International Monetary Fund (IMF) said: “Stay put. My message is it is less bad than we feared a couple of months ago — but less bad doesn't quite yet mean good. Let me start from what has improved and why we have to be cautious. What has improved is inflation seems to have started leading in the right direction, in other words, down.”

“What has improved is the prospect for China to boost growth.

Kristalina Georgieva said, “We project 2.7% for the world. This may be corrected somewhat in a couple of days... What is positive is that we have seen demonstrably the strength of labour markets translating into consumers spending and keeping the economy up.”

Speaking at the closing meeting of the Forum’s Annual Meeting, Global Economic Outlook: Is this the End of an Era?, Kristalina Georgieva, Managing Director of the IMF, has urged realism in the face of those predictions, imploring monetary authorities to “stay put.”

However, she went on to reiterate her plea for caution, making clear that the global economic outlook remains poor.

“Why we should be cautious? Well, first, 2.7% growth, if this is the growth we achieve, by far is not fabulous. This is the third lowest growth rate in the last decades after the global financial crisis and COVID. It's not great.”

She also warned that a resurgent Chinese economy — dormant for three years during the pandemic — could inflame inflation just as the rest of the world appeared to be getting to grips with it.

“What if the good news of China growing faster translates into oil and gas prices jumping up, putting pressure on inflation?”

“Stay in the middle of realism,” said Georgieva, “that seems to serve the world well.”

Agencies