The world economy is at risk of slowing down growth as well as getting trapped in debt due to rising tensions along with ongoing conflicts between different countries in the world. International Monetary Fund chief Kristalina Georgieva said this on Thursday while warning the world. He said that the current situation is affecting the entire world. According to PTI news, Georgieva urged China’s leaders to take more decisive steps to bring their country’s slowing economy back on track otherwise there is a risk of economic growth rate going down.
it’s time to be worried
According to the news, International Monetary Fund (IMF) MD Georgieva said during the meeting of IMF and World Bank that this is the time to be worried. IMF has estimated the global growth rate this year to be 3.2 percent, which is low. He said global trade remains weak with conflict and rising global tensions. This tension also includes the poor relations between the world’s two largest economies – America and China. In fact, trade is no longer a powerful engine of growth. We live in a more fragmented global economy.
Jobs will decrease with income
He also says that many countries are struggling with the loans they took to deal with the Covid-19 pandemic. According to the IMF, this year the worldwide government debt will reach above $100,000 billion. This would be equivalent to 93 percent of global economic output. And it can reach 100 percent by the year 2030. Georgieva said that the global economy is in danger of getting stuck in a quagmire of low growth rates and high debt. This means jobs will reduce along with income.
The economic background is not completely disappointing
Georgieva also said that, nevertheless, the economic backdrop is not entirely bleak. The IMF says that the world has made great progress in curbing inflation. He said that other steps including higher interest rates by the Federal Reserve and other central banks have an important role in controlling inflation. According to Georgieva, the International Monetary Fund estimates that inflation in developed countries will come down to around two percent next year, which is in line with the target of many central banks.