Georgieva made these pronouncements while speaking at the China Development Forum in Beijing. She reiterated her view that 2023 would be "another challenging year" in the world of finance. She predicted that global growth would slow to below three percent due to a variety of factors, including the lingering effects of the Wuhan coronavirus (COVID-19) lockdowns, the economic effects of the conflict in Ukraine and soaring inflation.
The IMF director also pointed to policies put in place by the world's leading central banks since last year, including monetary tightening policies and interest rate hikes. Despite this, she remains a firm believer in the need to increase interest rates to deliberately slow down the global economy. (Related: IMF chief wants the Federal Reserve to keep raising interest rates.)
The IMF currently predicts global growth for the end of the year to be no more than 2.9 percent. These forecasts change every few months.
Despite predicting a better economic outlook for 2024, Georgieva noted that growth for that year will likely remain far below the global historic average of 3.8 percent and the overall outlook remains weak.
"Uncertainties are exceptionally high, with the outlook for the global economy likely to remain weak over the medium term. It is also clear that risks to financial stability have increased," said Georgieva.
"At a time of higher debt levels, the rapid transition from a prolonged period of low-interest rates to much higher rates – [which are] necessary to fight inflation – inevitably generates stresses and vulnerabilities, as evidenced by recent developments in the banking sector in some advanced economies."
IMF monitoring developments in global banking
Georgieva claimed policymakers in advanced economies affected by the recent banking crisis "responded decisively" and prevented the situation from worsening even further. But still, vigilance is necessary.
"These actions have eased market stress to some extent, but uncertainty is high, which underscored the need for vigilance," said Georgieva.
The IMF director's comments came following the recent shake-up in the financial sector caused by the collapse of Silicon Valley Bank and Signature bank in the United States and the Swiss government brokered-takeover of Credit Suisse by rival bank UBS. These upheavals have led to fears of contagion to other banking and financial corporations.
"So, we continue to monitor developments closely and are assessing potential implications for the global economic outlook and global financial stability," Georgieva said. She added that the IMF was paying close attention to how the banking crisis will affect the world's most vulnerable countries, particularly low-income nations with high levels of debt.
Bank shares around the world are continuing to tumble as fears about the health of the financial sector remain. The biggest concern is in Germany, as the nation's chancellor, Olaf Scholz, was forced to give reassurances about the health of the country's largest bank, Deutsche Bank, after the long-troubled lender became a recent focus of investor concerns.
This is not the first time Georgieva has made rather dire predictions regarding the global economy. Last October, she warned that inflation, strains on global food and energy supplies, the conflict in Ukraine, slowing job growth and rising risks of a global recession were just a few of the factors making up a "new normal" outlook for the world's economy.
In a speech at Georgetown University, Georgieva warned that there has been a fundamental shift in the global economy. It has turned from relatively predictable to one that is more fragile and with greater uncertainty built into it following "shock after shock after shock."
Learn more about the state of the global economy at MarketCrash.news.
Watch this episode of the "Health Ranger Report" as Mike Adams, the Health Ranger, warns about how everyone will bear witness to the greatest financial collapse in human history.
This video is from the Health Ranger Report channel on Brighteon.com.
More related stories:
Federal Reserve will keep increasing interest rates despite worsening banking crisis.
IMF says world needs to prepare for the "unthinkable" after COVID, war in Ukraine.
Global policymakers: Economic downturn could become an abrupt economic collapse.
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