The International Monetary Fund (IMF) forecasts global gross domestic product (GDP) growth to be around 3% over the next five years, which represents the worst medium-term prospects since 1990. The data is also up below the global GDP growth average of the last 20 years, which has stood at 3.8%.

“This makes it even more difficult to reduce poverty, heal the economic scars of the Covid crisis and provide new and better opportunities for all,” IMF Managing Director Kristalina Georgieva said during her opening speech at the spring meetings of the IMF. IMF and the World Bank.

The Fund’s new macro forecasts will be released next week. However, Georgieva has advanced that her new estimates for world GDP imply that growth will be less than 3% this year. The data is not new, since its latest projections, published in January, also showed growth of 2.9% for 2023 and 3.1% for 2024. In any case, Georgieva has emphasized that growth continues to be “weak ” if compared with the historical record, both in the short and medium term.

In her speech, Georgieva has indicated that the objective of politicians should be to achieve a “robust” recovery in the short term while laying the foundations for “more inclusive, more sustainable and stronger” growth.

In this way, the Bulgarian has set a series of priorities that should be followed. First, she has placed fighting inflation and safeguarding financial stability, since robust growth cannot be achieved without both.

“Fighting inflation has become more complex with recent pressures from the banking sector in the United States and Switzerland, which serves as a reminder of how difficult it is to quickly transition from a period of prolonged low interest rates and ample liquidity to rates much higher and scarce liquidity”, he indicated.

In any case, Georgieva has stressed that banks are now more solid and resilient than in the 2008 crisis, although she has urged the authorities to remain vigilant in case there are hidden vulnerabilities in the banking sector or in the non-bank financial sector. .

As long as there are no major problems, it has ordered the central banks to continue focusing on tackling inflation. Should other banking sector vulnerabilities materialize, central banks would face a more difficult environment. “This is why they need to be more vigilant and agile than ever,” said the IMF’s managing director.

The second priority is to improve growth prospects in the medium term. Thus, it has urged the authorities to raise productivity and growth potential through structural reforms, accelerating the digital revolution and improving the business environment.

“Only closing the gap in women’s labor participation could increase economic production by 35% in countries with the greatest gender inequality,” Georgieva has proposed. Other possible measures would be to redirect more investments to green projects for the ecological transition and to avoid commercial fragmentation.

“Countries can protect their national and economic security by continuing to trade and being pragmatic about strengthening supply chains. IMF research shows that diversifying supply chains can cut potential economic losses from chain disruptions in half” , has added.

The third priority marked by the head of the Fund is to increase international solidarity to reduce the debt problems of the poorest countries.