Germany had to boost its economy with higher spending. This demands the new head of the International Monetary Fund (IMF) Kristalina Georgieva. In particular, additional spending on infrastructure and research would have the potential to boost growth, Georgieva said in a speech.
Given the looming slowdown in the global economy, it is time for countries with financial space such as Germany, the Netherlands and South Korea to prepare for this path, Georgieva said.
The world is in a phase of "simultaneous weakening," said the new IMF chief. This year, the IMF expects "slower growth in nearly 90 percent of the world." This is the weakest growth since the beginning of the decade.
$ 700 billion in costs due to trade conflict between the US and China
Germany is one of the few countries that should already start to boost the economy with higher spending or to prepare for this step, said Georgieva.
The Bulgarian also commented on the continuing trade conflict between the USA and China. According to an IMF forecast, global economic output could fall by up to $ 700 billion next year.
The sum is made up of direct and indirect costs - such as loss of confidence, uncertainty and market reactions. More detailed data will be published by the IMF next week. "Everyone loses in a trade war," said the economist, calling on the conflicting parties to come to an agreement.
66-year-old Georgieva has headed the IMF since 1 October. She took over the post from the French Christine Lagarde. Previously Georgieva was Managing Director of the World Bank and EU Commissioner.