IMF chief says markets have good reasons to be more upbeat on economy
THE head of the International Monetary Fund (IMF) on Monday (Feb 13) said that financial markets had good reasons to be more upbeat, pointing to the likelihood of the US economy avoiding a recession, as well as China’s post-pandemic reopening.
IMF managing director Kristalina Georgieva described the agency’s outlook for 2023 as “less bad, not good”, given that it has forecast a slowdown in economic growth this year, and inflation remained a concern. She was speaking at the World Government Summit in Dubai, the United Arab Emirates (UAE).
The positive factors she cited included resilient US and European Union labour markets, China’s reopening, and “surprisingly good results of central banks tightening up financial conditions and inflation finally trimming down, although the fight is not yet won”.
She added that the IMF expected some monetary tightening this year, but did not project it to continue “way into” 2024.
“The markets have good reasons to be more upbeat because what they are finally seeing is the US economy likely (avoiding a) recession… They are also seeing China reopening and Chinese consumers rushing to spend the money they saved during the pandemic, the lockdown.”
She also lauded Gulf Arab oil- and gas-producers for “relentlessly” pursuing fiscal reforms, including diversifying revenue sources by introducing new taxes.
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The UAE will host the COP28 climate conference in November.
The designation of the country’s climate envoy as COP28 president has fuelled activists’ worries that big industry was hijacking the global response to the warming crisis, as he is also head of the state oil company.
Asked about the criticism, Georgieva said: “Our focus is on what needs to be done and how we can do it together. We talk about an inclusive approach to fighting the climate crisis. Inclusive is exactly that: all hands on deck.”
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She added: “If we miss, yet again, a chance to deliver on our own promises, we are all cooked.” REUTERS
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