Slow global recovery poses challenges for world’s poor-IMF MD
A robust recovery of the global economy remains elusive as a rapid transition to higher interest rates exposes financial vulnerabilities, the IMF’s managing director said on Monday.
Speaking to World Bank President David Malpass on the first day of the Spring Meetings, Kristalina Georgieva said that the global economy’s slow pace of projected growth over the next five years posed particular challenges for the world’s poorest countries.
While emerging-market economies are expected to see relatively strong growth, the outlook for developing economies is weaker. This “dangerous divergence” in growth prospects means that average per-capita incomes in low-income countries will not grow fast enough to converge with those of middle-income countries.
Malpass said that capital was flowing away from developing economies and that small businesses in these countries could not access the investment they need to expand.
This, along with high food and fertilizer prices, was fueling income divergence and adding to global inequality and fragility, he said. “It’s gravely concerning.”
