IMF warns China of economic crisis and calls for vigilance

Warnings from the International Monetary Fund (IMF) about the possibility of further declining world economic growth continue, with Ukraine’s war, rising oil prices and the food crisis even reaching Asia.

International Monetary Fund chief Kristalina Georgieva: “that risks to financial stability have increased and called for continued vigilance although actions by advanced economies have calmed market stress”.

she added: “2023 would be another challenging year, with global growth slowing to below 3% due to scarring from the pandemic, the war in Ukraine and monetary tightening”.

In her word, she weighed in: “even with a better outlook for 2024, global growth will remain well below its historic average of 3.8% and the overall outlook remained weak”.

Georgieva said policymakers in advanced economies had responded decisively to financial stability risks in the wake of bank collapses but even so vigilance was needed.

“What happens in the economy, the world, can be divided into teams and competitors,” she said.

Georgieva said China’s strong economic rebound, with projected GDP growth of 5.2% in 2023, offered some hope for the world economy, with China expected to account for around one third of global growth in 2023.

It recognized that each 1 percentage point increase in China’s GDP growth resulted in a 0.3 percentage point increase in growth in other Asian economies.

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