India and China are expected to account for half of the global economic growth this year, International Monetary Fund (IMF) managing director Kristalina Georgieva said on Thursday.
The IMF chief said the world economy would continue to see a sharp slowdown against the backdrop of the Covid-19 pandemic and the aftermath of the Russia-Ukraine war, adding that it is expected to grow at less than 3% in 2023.
"The period of slower economic activity will be prolonged, with the next five years witnessing less than 3% growth, our lowest medium-term growth forecast since 1990, and well below the average of 3.8% from the past two decades," she pointed out.
"Some momentum comes from emerging economies -- Asia especially is a bright spot. India and China are expected to account for half of global growth in 2023. But others face a steeper climb," she explained.
The IMF chief said low-income countries would find it challenging to catch up due to slower growth, which she said was a "severe blow".
"Poverty and hunger could further increase, a dangerous trend that was started by the Covid-19 crisis," she said.
Georgieva's remarks came ahead of the spring meetings of the IMF and World Bank next week, where the most pressing issues of the global economy would be discussed by policymakers. The meetings will take place against the backdrop of central banks (across the world) hiking interest rates in a bid to curb skyrocketing inflation rates.
The IMF chief stated that this year, about 90% of advanced economies are projected to witness a dip in their growth rates.
Higher borrowing costs come at a time when their export demand has weakened for low-income nations, she said.
Although the global banking system had "come a long way" since the 2008 financial crisis, "concerns remain about vulnerabilities that may be hidden, not just at banks but also non-banks", Georgieva stated.
"Now is not the time for complacency," she said.
(with inputs from PTI)
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Source : Indiatoday
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