Global economy heading for weakest growth since 1990, says IMF boss

theguardian.com:

The global economy is heading for the weakest period of growth since 1990 as higher interest rates set by the world’s top central banks drive up borrowing costs for households and businesses, the head of the International Monetary Fund has warned.

Kristalina Georgieva, the IMF’s managing director, said a sharp slowdown in the world economy last year after the aftershocks of the Covid pandemic and the Russian invasion of Ukraine would continue in 2023, and risked persisting for the next five years.

In a curtainraiser speech before the fund’s spring meetings in Washington DC next week, she said global growth would remain about 3% over the next five years – its lowest medium-term growth forecast since 1990.

“This makes it even harder to reduce poverty, heal the economic scars of the Covid crisis and provide new and better opportunities for all,” Georgieva said.

In a downbeat assessment as the world grapples with the worst inflation shock in decades, she said economic activity was slowing across advanced economies in particular. While there was some momentum from developing nations – including China and India – low-income countries were also suffering from higher borrowing costs and falling demand for their exports.

Ahead of the IMF publishing revised economic forecasts next week, Georgieva said global growth in 2022 had collapsed by almost half since the initial rebound from the Covid pandemic in 2021, sliding from 6.1% to 3.4%. With high inflation, rising borrowing costs and mounting geopolitical tensions, she said global growth was on track to drop below 3% in 2023 and remain weak for years to come.

As many as 90% of advanced economies would experience a decline in their growth rate this year, she warned, with activity in the