We May Be Sleepwalking Into A World That Would Be Poorer: IMF MD

IMF Managing Director Kristalina Georgieva said that the global outlook in the last three years-a relatively short period of time- has been hit by shock upon shock upon shock: a global pandemic, a war in Europe, and a cost-of-living crisis.

"And they have led to a rather gloomy picture for the world economy-for this year and especially for next year.

The dual impact of supply chain interruptions from the pandemic, and the very rapid increase of energy and food prices, has created stubbornly high inflation, leading to a tightening of financial conditions and an abrupt slowdown in global growth from 6 percent in 2021 to 3.2 percent in 2022. We project 2.7 percent for 2023, but with a 25 percent probability that growth may actually fall below 2 percent.

While we look at this gloomy picture, even more troubling is the trend towards increased fragmentation-at a time when we need each other the most. And I am very concerned that we may be sleepwalking into a world that would be poorer and less secure as a result," she stated.

"That takes me to my second point and a more positive turn in the story, a relative bright spot on a dark horizon. ASEAN is projected to grow at 5 percent this year and 4.7 percent next year, well above the global average.

This is because of steady progress on reforms and the tremendous integration of their economies. That is why I very much look to ASEAN to be a key player in helping to prevent fragmentation, and in actually encouraging the world to stay on the right path," she added.

Ms Georgieva was speaking at the Global Challenges Facing ASEAN and Policy Priorities.