Weak global economy, high inflation demand strong G-20 action: IMF

By Ovunc Kutlu

ISTANBUL (AA) – Weak global economy, high inflation, and rising fragmentation demand strong action from the G-20, the International Monetary Fund (IMF) Managing Director Kristalina Georgieva said Thursday.

"Agile multilateral support is vital to tackle common challenges posed by debt vulnerabilities, climate change, and limited concessional financing — especially for countries hit by shocks not of their making," she said in a statement.

Georgieva noted that the IMF in April projected global economic growth at 2.8% in 2023, down from 3.4% in 2022, with over 70% of it expected to come from the Asia-Pacific region.

She, however, said there is "a mixed picture" stemming from weakness in manufacturing and financial fragilities, stressing that inflation remains well above central banks’ targets in most G-20 countries.

Georgieva's comments come before the G-20 finance ministers and central bank governors meeting in Gandhinagar, India, on July 17-18.

"The global economy is navigating a challenging period," the IMF said Thursday in its G-20 Surveillance Note report. "Risks are mostly tilted towards the downside."

"G-20 leadership can help ensure the global financial safety net is available to help developing economies navigate multiple shocks and ensure that unsustainable debt burdens are promptly addressed. Governments should take steps to limit fragmentation, including resisting discriminatory policies and industrial policies with (potentially) protectionist provisions," it added.