Global Economy Is Resilient, Challenged By Weak Growth, Deepening Divergence, Says IMF

ABIDJAN, 5th October, 2023 (WAM) – The IMF said tglobal economy is resilient, but challenged by weak growth and deepening divergence.

In its 2023 Annual Meetings Curtain Raiser Speech here today, IMF Managing Director Kristalina Georgieva said:'' The world economy has shown remarkable resilience, and the first half of 2023 has brought some good news, largely because of stronger-than-expected demand for services and tangible progress in the fight against inflation. This increases the chances for a soft landing for the global economy. But we can't let our guard down.''

''While the recovery from the shocks of the past few years continues, it is slow and uneven. As you will see from our updated forecast next week, the current pace of global growth remains quite weak, well below the 3.8 percent average in the two decades before the pandemic. And looking ahead over the medium term, growth prospects have weakened further.''

Yet, she added, there are stark differences in growth dynamics. Stronger momentum comes from the United States. India and several other emerging economies, including Côte d'Ivoire, are bright spots most advanced economies are slowing down. And in China economic activity is below expectation, and many countries struggle with anemic growth.
Economic fragmentation, she noted, threatens to further undermine growth prospects, especially for emerging and developing economies, including right here in Africa.

''This results in deepening divergence in economic fortunes between and within different country groups. Part of it comes from“economic scarring”. We estimate that the cumulative
global output loss from successive shocks since 2020 amounts to $3.7 trillion as of 2023.''

Given these diverging trends, the Fund has an important role to play to help countries identify
policy choices and pursue successful growth strategies. Three policy priorities stand out.

First, reinforce economic and financial stability

Second, is the need to address infrastructure gaps-old and new

The third pillar is the required improvement in governance and state capacity to foster inclusive growth

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