RIYADH: International Monetary Fund chief Kristalina Georgieva said on Sunday that risks to financial stability have increased and called for continued vigilance although actions by advanced economies have calmed market stress.
Speaking during the first day of the China Development Forum, Georgieva noted that 2023 poses yet another challenging and thought-provoking year with an expected global growth rate slowing to below 3 percent.
This is mainly attributed to the repercussion of the pandemic, the Russia-Ukraine war, as well as monetary tightening, the IMF chief explained.
Even though progressive economies have attempted to compose market stress, the overall outlook for 2024 remains weak with the growth rate estimated to stand below the historic average of 3.8 percent, she pointed out.
"So, we continue to monitor developments closely and are assessing potential implications for the global economic outlook and global financial stability," Georgieva reassured.
Moreover, when it comes to vulnerable and low-income countries with high levels of debt, she emphasized that the IMF is paying close attention to those in order to further support them.
In addition to this, there is a risk of the world splitting into rival economic blocs, resulting in "a dangerous division that would leave everyone poorer and less secure," as a consequence of geo-economic fragmentation, Georgieva warned.
That said, China has a significant role to play with regard to minimizing the risks of financial instability. It has been forecasted that every one percentage point boost in China’s gross domestic product results in a 0.3 percentage point rise in growth in other Asian economies, she said.
Consequently, policymakers in China are urged to focus on further raising productivity while rebalancing the economy and shifting away from investment while moving towards more sturdy consumption-driven growth.
According to conjectures, such reforms are capable of lifting real GDP by as much as 2.5 percent by 2027, and by around 18 percent by 2037, explained.
The China Development Forum is an annual high-level global conference held in China right after the National People's Congress and the Chinese People's Political Consultative Conference each year.
This year, the forum is taking place from March 25 up until March 27 under the theme “Economic Recovery: Opportunities and Cooperation.”
The conference poses an opportunity for participants to connect with political, economic, and significant decision-makers in the Asian country.