IMF estimates that the world economy is “better than expected”, except in poor countries

The managing director of International Monetary Fund (IMF), Kristalina Georgieva, affirmed this Wednesday that the world economy has resisted crises better than expected, but warned that low-income countries have done worse than expected.

“The world economy is better today than we feared a year ago, growth is being maintained, inflation is falling and the expectation that we will overcome this stage of high inflation without recession, the so-called soft landing, will also translate into better conditions for low income countries“, he pointed out Georgieva.

However, he added, the impact of the pandemic and other ‘shocks’ such as the war in Ukraine “feels more deeply” in poor countries.

“Our analyzes show that fear of shocks in advanced and emerging market economies is less than we feared, but fear in low-income countries is greater than we expected.”he explained.

Georgieva participated this Wednesday together with the president of the world BankAjay Banga, at a forum in Washington to discuss what low-income countries can do to foster macroeconomic stability, promote sustainable and inclusive growth, and unlock progress toward the sustainable development goals.

According to Georgievathe Gross Domestic Product (GDP) of low-income countries is today 10% below what was projected before the pandemic and most have “high debt levels“, which they consume”13% of GDP”.

“What worries me especially is that since growth is slow, your chances of catching up actually get worse“said the director.

In the opinion of Bangawe must not forget that paying the debt translates into postponing improvements in “health and education“, For example.

“In fact, several of them are spending more on paying off their debt than they will ever be able to spend on healthcare and education and that simply tells you how challenging their own circumstances are.”he explained.

He IMF and the world Bank They hold their spring meetings the week of April 15 in which the challenges of low-income countries will be one of the central topics.

“I believe that over the next few years this will be the moment in our history when the IMF will focus more of its attention and programs on the group of low-income countries.”he explained.

And in the next four years, he explained, “low-income countries would need 814 billion” of international support.

“Obviously, it cannot only be financing from our institutions and a large part has to come from private sector investments at the national and international level.“, said.