During the recent meeting of the International Monetary Fund and the World Bank, Kristalina Georgieva, head of the IMF, discussed global economic challenges. Despite issues such as rising interest rates and conflicts in Ukraine and Gaza, Georgieva noted that the world economy has remained resilient. However, she expressed concerns about persistent inflation and increasing government debt levels.

Georgieva pointed out that while inflation has decreased in some countries, it has not been fully eradicated. In particular, strong economic growth in the United States has led to slower progress in reducing inflation. Furthermore, worldwide government debt reached 93% of total economic output last year due to increased spending related to the COVID-19 pandemic. To address these challenges, Georgieva emphasized the importance of improving tax collection systems and managing public funds efficiently. She highlighted the need for fiscal resilience to prepare for future shocks that may impact global economies.

The IMF expects global growth to be modest at 3.2% this year and in 2023 despite some positive economic indicators. Georgieva highlighted several factors contributing to sluggish global growth such as low productivity gains and an aging workforce. The United States has outperformed other countries due to innovation-friendly policies and lower energy costs leading to productivity gains.

To boost their economies, Georgieva suggested countries reduce bureaucratic barriers and increase women’s participation in the workforce by addressing these challenges through structural reforms they can strengthen their economies better prepare for future economic shocks.