The International Monetary Fund (IMF) has warned that the world economy is expected to grow less than 3% this year, down from 3.4% last year, increasing the risk of hunger and poverty globally. IMF chief Kristalina Georgieva said the period of slower economic activity will be prolonged, with the next five years of growth remaining around 3%, and called it “our lowest medium-term growth forecast since 1990, and well below the average of 3.8% from the past two decades.” She also said that slower growth would be a “severe blow," making it even harder for low-income nations to catch up. Given the economic projections, non-governmental organizations are calling for the IMF to allocate more funds to low-income countries through Special Drawing Rights, which are an IMF international reserve asset that can be exchanged for hard currency. Georgieva also warned that high-interest rates, a series of bank failures in the U.S. and Europe, and deepening geopolitical divisions are threatening global financial stability.
https://abcnews.go.com/Politics/wireStory/imf-head-expects-3-global-economic-growth-2023-98404025
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Global financial stability really is in question as institutions are failing miserably. US and European banks are failing and there have also been financial scandals like the one in France a couple weeks ago involving Societe Generale. The rise in interest rates and inflation makes for a formula that will allow for the economy to continue struggling as the costs to participate is much higher compared to just a few years ago. It is unfortunate to see that hunger is rising again and growth will fall but there is not much we can do immediately to fix the issues ahead.
The IMF's prediction of slow global economic growth can have multiple negative effects. The slower growth of the world economy, especially in low-income countries, could increase the risk of hunger and poverty globally. The IMF chief Kristalina Georgieva has warned that slower growth would be a "severe blow," making it even harder for low-income nations to catch up. With the expected slower growth of the world economy, non-governmental organizations are calling for the IMF to allocate more funds to low-income countries through Special Drawing Rights. If this is not done, low-income countries may not have the financial resources to implement development. The IMF chief has also warned that high-interest rates, a series of bank failures in the U.S. and Europe, and deepening geopolitical divisions are threatening global financial stability. These factors could trigger a financial crisis that could lead to a recession, which would have negative effects on businesses, consumers, and governments worldwide.
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