IMF chief urges global policymakers to avoid protectionism

Image: IMF

Kristalina Georgieva, the managing director of the International Monetary Fund (IMF) called on world leaders at the recent Atlantic Council meeting to prioritise bold reforms and resist protectionist policies to accelerate global economic growth amid rising risks and divergence.

Georgieva, addressed the Atlantic Council, acknowledging relief in avoiding a global recession but stressing ongoing concerns.

While praising the escape from stagflation, she warned of a potential “tepid 20s” characterised by sluggish growth unless policymakers take decisive action.

“Overall, based on the data, it is tempting to breathe a sigh of relief. We have avoided the global recession and a period of stagflation. Some have predicted it, it has not happened, but there are still plenty of things to worry about. The global environment has become more challenging,” she said.

IMF chief highlights the impact of the pandemic

Georgieva highlighted the pandemic’s lingering effects, including a staggering $3.3tn in global output losses since 2020, with vulnerable nations disproportionately impacted. Furthermore, she pointed out a widening economic gap both within and between countries.

Policy crossroads

The IMF chief presented world leaders with a stark choice: maintain the status quo with subpar outcomes or embrace transformative policies.

Georgieva advocated addressing inflation and debt burdens while promoting economic reforms to bolster productivity inclusivity, and sustainable growth.

In her speech, delivered ahead of the upcoming IMF and World Bank Spring Meetings, Georgieva identified artificial intelligence (AI) as a significant challenge and opportunity.

While acknowledging AI’s potential to accelerate the fourth industrial revolution, she also cautioned of job displacement risks. A recent IMF study suggests up to 40 per cent of global jobs, and 60 per cent in advanced economies, could be impacted by AI.

Georgieva emphasised the importance of investing in digital infrastructure, workforce skills and robust social safety nets to manage AI integration and maximise its impact on productivity.

In other news, the Executive Board of the International Monetary Fund (IMF) selected Georgieva to serve as IMF managing director for a second five-year term starting on October 1. The board’s decision was taken by consensus.