IMF chief warns of potential long-term pitfalls

The International Monetary Fund chief, Kristalina Georgieva warned there are signs of potential lack of vitality through the 2020s. Although economic activity in the United States and emerging markets is projected to help drive global growth by about 3% this year, the figure is below the annual historic average.

“Without a course correction, we are indeed heading for ‘the Tepid Twenties’ -– a sluggish and disappointing decade,” said Kristalina Georgieva, in announcing the economic projection and longer-term outlook.

She said global economic activity is weak by past measurements and debt is up, posing major challenges to public finances in many parts of the world.

“The scars of the pandemic are still with us. The global output loss since 2020 is around $3.3 trillion, with the costs disproportionately falling on the most vulnerable countries,” she said.

The anticipated growth rate of just more than 3% is slightly above last year’s projection. The historic average is 3.8%.

“Global growth is marginally stronger on account of robust activity in the United States and in many emerging market economies,” Georgieva said.