IMF chief says global fight against hot inflation showing gains

THE International Monetary Fund (IMF) sees growing evidence that a global inflation spike that’s triggered a cost-of-living crisis in many countries is subsiding, managing director Kristalina Georgieva said.

“We see inflation finally trimming down in quite a number of countries,” Georgieva told a conference in Dubai on Tuesday (Feb 14). “The chance of finally getting on top of the problem of cost of living being a major disrupter for millions and millions of people, we see light at the end of this tunnel.”

Many nations are reeling from inflation, higher interest rates and elevated food and energy costs all while dealing with climate change and either slower growth or recession. Surging prices have forced central banks worldwide to tighten monetary policy.

Last month, the fund estimated world consumer-price increases would slow to 6.6 per cent this year, 0.1 percentage point higher than the October projection, following 8.8 per cent in 2022. It forecast further slowing to 4.3 per cent in 2024. Inflation rates are expected to be lower in about 84 per cent of countries in 2023 than in 2022.

In the same report, the IMF raised its global economic growth outlook for the first time in a year, with resilient US spending and China’s reopening buttressing demand against a litany of risks.

World gross domestic product will likely grow an estimated 2.9 per cent in 2023, 0.2 percentage point more than forecast in October. While that’s a slowdown from a 3.4 per cent expansion in 2022, the IMF said it expects growth will bottom out this year before accelerating to 3.1 per cent next year.

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Georgieva reiterated the outlook, saying that while global growth is bottoming out, some of the fund’s major concerns persist, including unexpected events like the Covid-19 pandemic, Russia’s war in Ukraine and the earthquake that hit parts of Turkey and Syria.

“The world economy is still in a very difficult place,” the IMF chief said. “Global growth is slowing down in 2023 but it might be a turning point,” she said, adding that authorities need to be much more oriented towards building resilience on all levels to be able to better handle shocks. BLOOMBERG