May 30, 2024

IMF Forecasts Lowest Growth in Decades as World Leaders Meet in Washington to Tackle Debt and Financial Crisis

October 10, 2022 - WASHINGTON DC. 2022 IMF/ WORLD BANK ANNUAL MEETINGS. A conversation between IMF Managing Director Kristalina Georgieva and World Bank Group President David Malpass. The Annual Meetings are taking place as the world grapples with the challenges of the pandemic, the war in Ukraine, and a global food and energy crisis. These compounding crises are threatening livelihoods and taking a toll on the most vulnerable. There is a profound urgency for policymakers, international organizations, and the private sector to take decisive and coordinated action to build resilience in this era of volatility. David R. Malpass President, World Bank Group; Kristalina Georgieva, Managing Director, International Monetary Fund; Tatiana Mossot Communications Officer, IMF. Photo: World Bank / Grant Ellis

The International Monetary Fund (IMF) has predicted that the world’s growth will hit its lowest point in decades. This comes as global leaders descend on Washington for IMF, World Bank, G7 and G20 meetings. The IMF’s flagship World Economic Outlook report anticipates a fall in growth to 2.8% this year.

According to Eric LeCompte, Executive Director of the religious development group Jubilee USA Network, high inflation and interest rates and ongoing wars have led to a rise in debt and food crises in many countries. He notes that “more people are facing hunger because of intertwined global crises.” The report highlights that high debt ratios in low- and middle-income countries as interest rates rise are of concern. The IMF suggests that debt restructuring is necessary to reduce debt.

The Sovereign Debt Roundtable, a forum that brings together stakeholders representing the private sector and lending and borrowing countries, met on Wednesday. The group’s goal is to overcome challenges related to participation from China and the private sector in current debt relief initiatives. Legislation is being pushed through in New York State that ensures the private sector participates in debt relief.

The IMF released the Global Financial Stability report on Tuesday, finding that rising geopolitical tensions increase risks in the financial system. This, coupled with the war in Ukraine, means that the poorest countries have less capacity to face shocks and will suffer the most.

The G20 Finance Ministers met on Thursday, ahead of the conclusion of the IMF and World Bank Spring Meetings on Saturday. It is hoped that these meetings will help to find solutions to the debt crisis and promote global financial stability.

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