SLOW ECONOMIC GROWTH CONTRIBUTES TO HUNGER AND POVERTY: IMF

Sat 08 Apr 2023:

The head of the International Monetary Fund (IMF) says that the global economy is predicted to grow by less than 3% this year, down from 3.4% last year, raising the risk of hunger and poverty around the world.

Kristalina Georgieva said on Thursday that growth is expected to remain about 3 percent for the next five years, calling it “our lowest medium-term growth forecast since 1990”, adding that it would be a “severe blow” making it even harder for low-income nations to catch up.

“Poverty and hunger could further increase, a dangerous trend that was started by the COVID crisis,” she said.

Georgieva made remarks ahead of next week’s meetings of the IMF and the World Bank, where policymakers will gather to discuss the most important issues affecting the world economy.

The annual meeting will be held as central banks around the world keep raising interest rates to control persistent inflation and as a persistent debt crisis in emerging economies increases debt burdens and hinders countries from growing.

Georgieva further states that low-income nations are anticipated to experience a double shock from high borrowing costs and a drop in export demand, which could result in an increase in hunger and poverty.

“About 15 percent of low-income countries are already in debt distress an additional 45 percent are near it,” she added, calling on wealthier IMF members to do more to provide support.

The IMF head said persistently high interest rates, a series of bank failures in the US and Europe, and deepening geopolitical divisions are threatening global financial stability.

“Nations have so far been “resilient climbers” out of the coronavirus pandemic, which has killed close to 6.9 million people worldwide, disrupted international supply chains, and made food insecurity a global problem” said Georgieva,

However, there were still considerable concerns as advanced economies face the challenges of high inflation and poorer nations are burdened by debt, and the United States, the European Union and others are rethinking their trade relationships with China, adding to fears of instability.

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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