IMF boss cautious about global economy despite hopes of a soft landing

The head of the International Monetary Fund (IMF) Kristalina Georgieva remains cautious about the global economy despite hopes of a soft landing, she said at a conference on Monday in Zurich.

“Inflation is on the decline” and many central banks “are making plans to reduce their interest rates or “have started to reduce them,” she explained during a conference at the alongside Thomas Jordan, president of the Swiss National Bank (SNB) who lowered its reference interest rate by a quarter of a point in mid-March.

And we hear the term “soft landing” resurface, which is “the likely outcome this year,” she continued. “But hold on to your seat belts because we haven’t quite landed yet,” she added.

“Inflation is falling but it has not been eliminated,” she argued during this conference organized by the Swiss Institute for International Research at the University of Zurich.

In addition, economic growth is at a historically low level and the global economy could face profound changes, particularly with artificial intelligence, Ms. Georgieva also underlined.

Artificial intelligence risks hitting the job market “like a tsunami”, with “very little time” to prepare workers and businesses for this change, she warned.

The IMF director was interrupted five times by activists who came to protest against the debt of poor countries and climate change.

While Ms. Georgieva presented her analysis of the economic situation, a young woman stood up and questioned her on North-South inequalities. A few minutes after she resumed speaking, other activists took turns interrupting her before a small group of five people stood up with a banner to demand the cancellation of the debt of poor countries. They then left without incident.

In mid-April, the IMF slightly revised upwards its growth forecast for 2024, estimating it at 3.2% (compared to 3.1% previously expected). The Washington-based institution notably raised its growth forecast for the United States, but highlighted divergences in the growth of advanced economies.

© 2024 AFP

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