IMF warns of high inflation, interest rates amid weaker global growth outlook

Shocks such as the COVID-19 pandemic and the Russia-Ukraine conflict have created a harsh environment, leaving the world not only struggling with high inflation and slow growth but also facing extraordinary instability.

International Monetary Fund (IMF) Managing Director Kristalina Georgieva

Inflationary pressures and higher interest rates will remain key issues for the global economy next year, along with overarching concerns about the long-term growth outlook, according to International Monetary Fund (IMF) Managing Director Kristalina Georgieva.

“The shocks that have hit us, the COVID-19 pandemic, the Russia-Ukraine conflict, they have created a harsh environment. We are not only struggling with high inflation and slowing growth, but also facing extraordinary uncertainty,” Georgieva told Croatian state broadcaster HRT on June 4.

“Our biggest concern is the longer-term growth outlook. We expect (the global economy) to grow by only 3% over the next five years,” noted Kristalina Georgieva, who attended an international finance conference in Croatia.

The conflict in Ukraine has played a major role, particularly in “undoing the peace gains we have enjoyed over the past 30 years,” the IMF chief said. “Defense spending is rising, leaving less money for development and growth and helping poor countries,” Georgieva said.

Speaking about growth, the IMF chief said the global GDP growth forecast for this year is 2.8%, compared to 3.4% last year. “More worryingly, inflation is persistent and that means interest rates will have to be higher for longer,” Georgieva said.

According to Ms. Georgieva, although there will be some progress, inflation will still be high. Regarding interest rates, at least this year and next year, the world will have to be ready for higher interest rates.

For the global economy, she warned, this will impact investment and consumption at a time when we are seeing rising global poverty and expect tough times ahead in the next few years.

(According to Baotintuc.vn)

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