Global economic growth rate will remain around three percent for the next five years - International Monetary Fund Chief Kristalina Georgieva warns

Washington – Rising interest rates, the crisis in the banking sector in the US and Europe, and growing differences at the geopolitical level have shaken the stability of the global economy. This impacts the economy’s development, and the world economy’s growth rate will remain around three percent for the next five years, warned IMF (International Monetary Fund) head Kristalina Georgieva. Last month, the World Bank warned that the ‘Lost decade’ crisis could hit the global economy in the wake of the economic slowdown and the crisis in the banking sector.

In an event held in the US, the head of the Monetary Fund presented her position regarding the global economy. ‘The cycle of economic development is slowing down, and there is a fear that this period will get longer.” “Economic activity is slowing in the US and the euro area, where higher interest rates weigh on demand. About 90 percent of advanced economies are projected to see a decline in their growth rate this year. We project global growth to remain around 3 percent over the next five years – our lowest medium-term growth forecast since 1990, and well below the average of 3.8 percent from the past two decades,’ said Georgieva, drawing attention to the possible financial crisis.

Moreover, this declining growth rate will hit low-income countries the hardest. After the Coronavirus pandemic, poverty and hunger have been increasing rapidly worldwide. Besides, the head of the Monetary Fund expressed fear that this trend would continue due to the decline in the growth rate. ‘But the path ahead — and especially the path back to robust growth — is rough and foggy, and the ropes that hold us together may be weaker now than they were just a few years ago,’ at this time, Georgieva made aware of it.

Last month, the World Bank released a report titled ‘Falling Long Term Growth Prospects’. The report predicted a decline in the pace of the global economy. In the first decade of this century, the average growth rate of the global economy was six percent. However, the average growth rate from 2022 to 2030 will remain at one-third of this. It seems like the global economy will grow at an average rate of 2.2 percent during this period. In such words, the World Bank had expressed concern over the ‘Lost Decade’ crisis.

Furthermore, the world’s leading economists and analysts have repeatedly been predicting a global recession, and there were claims that the recession this time would have a long-term impact. In this background, the statements of the two leading organisations, the World Bank and the IMF, regarding the long-term decline become noteworthy.

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