IMF chief warns that world risks falling into slow-growth rut and urges China to enact reforms

WASHINGTON -- The world economy, buffeted by conflict and growing geopolitical rivalries, is successful threat of getting stuck successful a slow-growth, high-debt rut, nan caput of nan International Monetary Fund warned Thursday. She besides urged Chinese leaders to return much decisive action to jump-start their country's sluggish economy aliases consequence seeing economical maturation plummet.

“These are anxious times,’’ nan fund’s managing director, Kristalina Georgieva, told reporters during nan autumn meetings of nan IMF and its sister agency, nan World Bank.

The IMF forecasts that nan world system will grow this twelvemonth astatine what Georgieva called an “anemic'' 3.2%.

Global waste and acquisition is lackluster astatine a clip of conflict and increasing geopolitical hostility — including frosty relations nan world's 2 largest economies, nan United States and China. ”Trade is nary much a powerful motor of growth,'' she said. "We unrecorded successful a much fragmented world economy.'

At nan aforesaid time, galore countries are struggling pinch debts they took connected to combat nan COVID-19 pandemic. The IMF expects authorities debts worldwide to to apical $100 trillion this year. That would adjacent to 93% of world economical output — a stock that is expected to attack 100% by 2030.

“The world system is successful threat of getting stuck connected a debased growth, precocious indebtedness path,'' Georgieva said. ”That intends little income and less jobs.''

Still, nan economical backdrop isn't wholly bleak.

The IMF says nan world has made sizeable advancement to rein successful inflation that surged successful 2021 and 2022 arsenic economies roared backmost pinch unexpected spot from pandemic lockdowns. She credited higher liking rates engineered by nan Federal Reserve and different cardinal banks and nan easing of backlogs astatine factories, ports and freight yards that had caused shortages, delays and higher prices.

In able countries, nan money expects ostentation to driblet adjacent twelvemonth to nan 2% sought by cardinal banks. And value pressures person eased without sending nan world into a recession. “For astir of nan world, a soft landing is successful sight,’’ Georgieva said.

But galore group are still struggling pinch precocious prices and economical uncertainty. World leaders are telling her that their economies are comparatively patient — but mean “people are not emotion bully astir their economical prospects.’’

The IMF, a 190-nation lending organization, useful to beforehand economical maturation and financial stableness and trim world poverty.

In its latest World Economic Outlook report, issued Tuesday, nan money forecast that nan erstwhile high-flying Chinese system would turn conscionable 4.8% this twelvemonth and 4.5% successful 2025, down from 5.2% successful 2023.

Georgieva urged nan Chinese authorities to displacement distant from dependence connected exports and toward much reliance connected spending by consumers, which she called a ”more reliable'' motor of growth. Taking "decisive action'' to reverse a illness successful nan Chinese spot market, she said, would boost consumers' assurance and willingness to spend.

"If China doesn’t move, imaginable maturation tin slow down to measurement beneath 4%,'' she said.