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Port in China: Stimuli expected for the global economy
Photo: Li Ziheng / dpa
The head of the International Monetary Fund (IMF), Kristalina Georgieva, fears a further increase in social tensions worldwide in view of the current economic situation.
"It's only January 12" and tensions for various reasons are already visible in Brazil, Peru, Bolivia, Colombia and Great Britain, Georgieva said in Washington on Thursday.
If the current economic situation affects the labor markets, further tensions could arise.
The world economy is expected to reach the predicted 2.7 percent in 2023.
"Growth will continue to slow in 2023," Georgieva said.
However, it will be another difficult year for the global economy and inflation will remain stubborn.
But she doesn't expect consecutive downgrades like last year, barring unexpected developments.
The IMF believes the slowdown in global growth will bottom out and reverse towards the end of the year and early 2024.
Georgieva is hoping for positive growth impetus from China, among other things.
After the People's Republic recently abandoned its strict zero-Covid policy, it can make a positive contribution to global economic growth, said the head of the IMF.
But even if the global economy develops worse in 2023 than the IMF last forecast in October, the labor market has so far proven to be resilient, explained the IMF boss.
This is also due to the fact that governments reacted quickly and gave people financial support in the face of rising food and energy prices.
However, the scope for such relief is narrowing, Georgieva warned.
The head of the IMF also referred again to the danger that the debt burden of many countries would increase dramatically in view of rising interest rates.
The IMF has been warning for months that around 60 percent of emerging and developing countries are at risk of falling into a serious debt crisis.
Georgieva demanded that a high-level meeting on debt restructuring with representatives of the main lenders and the private sector should take place in February.
mike/AFP