IMF: Scars of pandemic remain. Global output loss since 2020 at $3.3trln

Kristalina Georgieva has been reappointed as the Managing Director of the IMF for a five-year term.

The IMF’s forthcoming World Economic Outlook, set to be released next week, will emphasize a marginally stronger global growth trajectory, buoyed by robust activity in the United States and several emerging market economies. Despite these positive indicators, Georgieva cautioned that there are still significant concerns to address.

Speaking at an event hosted by the Atlantic Council, Georgieva pointed to sustained household consumption, increased business investment, alleviation of supply chain disruptions, and a decrease in inflation as factors contributing to the growth outlook. However, she also highlighted the growing challenges in the global environment, including escalating geopolitical tensions that raise the risk of fragmentation within the world economy.

Georgieva emphasized the lingering impact of the pandemic, noting that global output loss since 2020 amounts to approximately $3.3 trillion, with the most vulnerable countries bearing a disproportionate burden. She underscored the slowing prospects for growth since the global financial crisis, with inflation remaining unresolved, fiscal reserves depleted, and debt levels elevated, posing significant challenges to public finances across many nations.

Moreover, Georgieva highlighted a growing divergence both within and across country groups, particularly evident among low-income countries, which have been hardest hit by the pandemic. Among advanced economies, the United States stands out for its robust rebound, supported by increasing productivity growth, while Indonesia and India are performing relatively better among emerging market economies.