Bangkok:The global economy has managed to withstand recent shocks better than anticipated, though outcomes have varied across different countries. Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), warns that resilience should not be assumed in an uncertain and rapidly changing world, marked by significant vulnerabilities and structural transformations.
According to Emirates News Agency, Georgieva addressed the International Monetary and Financial Committee Annual Meetings in Bangkok, Thailand, emphasizing the need for caution due to the erosion of economic buffers. She highlighted that many low-income developing countries (LIDCs) and fragile and conflict-affected states (FCS) are particularly vulnerable. These nations are burdened with higher food and energy import costs, high debt sustainability risks, tighter global financial conditions, and diminishing official assistance.
Georgieva urged policymakers to utilize available tools within credible fiscal and monetary frameworks to maintain macroeconomic and financial stability. She stressed the importance of implementing reforms to encourage private-sector growth and prosperity. Despite challenges posed by geoeconomic fragmentation, she noted that international cooperation is crucial to managing cross-border risks and enhancing global stability.
Addressing institutional and governance gaps, infrastructure, skills, and technology readiness are vital for LIDCs and FCS to ensure that private investment and technological advancements lead to broader growth, rather than exacerbating income disparities. Georgieva affirmed the IMF's readiness to support its members by updating its surveillance, lending framework, and capacity development.
She also underscored the importance of the full implementation of the Poverty Reduction and Growth Trust (PRGT) financing framework to strengthen the IMF's ability to support low-income countries in addressing balance of payments issues.