The global economy is doing better than expected, even as it faces prolonged uncertainty and underwhelming medium-term growth prospects, the head of the IMF said today.<\/p>\n
The world economy is doing “better than feared, but worse than we need,” International Monetary Fund Managing Director Kristalina Georgieva told reporters in Washington, according to prepared remarks.<\/p>\n
She added that the Fund now expects global growth to slow “only slightly this year and next,” propped up by better-than-expected conditions in the United States, and among some other advanced, emerging market and developing countries.<\/p>\n
Georgieva’s remarks came ahead of next week’s gathering of finance ministers and central bank governors at the World Bank and the IMF in Washington.<\/p>\n
Trade is once again likely to dominate the agenda at the annual meetings, following US President Donald Trump’s decision earlier this year to unleash sweeping tariffs against many countries.<\/p>\n
‘Multiple shocks’<\/p>\n
“All signs point to a world economy that has generally withstood acute strains from multiple shocks,” Georgieva said, pointing to “improved policy fundamentals,” the adaptability of the private sector, lower-than-expected tariffs, and supportive financial conditions.<\/p>\n
“The world has avoided a tit-for-tat slide into trade war – so far,” she added.<\/p>\n
She noted that the US tariff rate has fallen from 23% in April to 17.5% today, a figure that nevertheless remains “far above” the rest of the world.<\/p>\n
But, she warned, the full effect of those tariffs “is still to unfold,” adding that the resilience of the world economy has yet to be “fully tested.”<\/p>\n
Against this backdrop, the Fund still expects global growth to remain at roughly 3% over the medium term, in line with previous forecasts – but below the 3.7%, on average, seen before the Covid-19 pandemic.<\/p>\n
To boost lacklustre growth prospects, Georgieva called on countries to act swiftly to “durably” lift output, rebuild fiscal buffers, and address “excessive” trade imbalances.<\/p>\n
The Fund’s prescriptions for policymakers differed by region, with Asia urged to deepen its internal trade, and to strengthen the service sector and access to finance.<\/p>\n
Carried out correctly, this could raise economic output by as much as 1.8% in the long run, she said.<\/p>\n
On the African continent, Georgieva called on countries to promote “business-friendly reforms,” and continue with efforts to build up the Continental Free Trade Area which, she said, could lift their real GDP per capita by “over 10%.”<\/p>\n
Tough love for Europe<\/p>\n
Georgieva reserved her harshest criticism for Europe, which has struggled with economic growth in recent years, in marked contrast with the US.<\/p>\n
To raise competition in the bloc, Georgieva called on the European Union to appoint a new “single market czar” to drive reforms, a move that would simplify the EU’s structure and consolidate the power to make the changes required.<\/p>\n
These changes include steps to deepen EU single market integration in financial services and energy.<\/p>\n
“Complete your project, and catch up with the private sector dynamism of the US,” she said.<\/p>\n
For the world’s largest economy, Georgieva urged the Trump administration to address the country’s federal deficit, and to take steps to incentivise household savings.<\/p>\n
And for China, the world’s second-largest economy, Georgieva reiterated the IMF’s ongoing calls for fiscal reforms to boost private consumption, and reduce dependence on industrial policy to drive growth.<\/p>\n","protected":false},"excerpt":{"rendered":"The global economy is doing better than expected, even as it faces prolonged uncertainty and underwhelming medium-term growth…\n","protected":false},"author":2,"featured_media":67335,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,113,61,60],"class_list":["post-67334","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-ie","tag-ireland"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/67334","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=67334"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/67334\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/67335"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=67334"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=67334"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=67334"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}