The new managing director of the International Monetary Fund (IMF) Kristalina Georgieva said that the effects of the global economic slowdown this year is “more pronounced” in some of the largest emerging market economies like India.
During her first speech at the helm of the multilateral organization, Georgieva argued that economic activity is softening in advanced economies, such as the US, Japan and, especially, the eurozone, while in other emerging markets, such as India and Brazil, the slowdown is even more pronounced this year.
The IMF chief warned of an economic slowdown in 2019 in 90 per cent of the world.
“In 2019, we expect slower growth in nearly 90 per cent of the world. The global economy is now in a synchronized slowdown,” Georgieva said at the IMF headquarters here on Tuesday, Efe news reported.
“This widespread deceleration means that growth this year will fall to its lowest rate since the beginning of the decade,” the Bulgarian economist, who takes over from Christine Lagarde who will become the president of the European Central Bank, explained.
Georgieva made this assessment one week ahead of the joint Annual Meeting between the IMF and World Bank (WB) in which both institutions will present their economic projections in a gathering of top central bankers and economy ministers.
The IMF chief warned that the World Economic Outlook for 2019 and 2020 reflects a complex situation compared to the previous figures presented in July in Chile.
China’s accelerated growth is experiencing a gradual decrease, she added.
“The precarious outlook presents challenges for countries already facing difficulties – including some of the Fund’s program countries.”
However, she said that about 40 emerging markets and developing economies, including 19 in sub-Saharan Africa, will have real GDP growth rates above 5 per cent.
Georgieva blamed trade disputes, such as the commercial war between Washington and Beijing, for global economic sluggishness, in addition to geopolitical tensions, such as Brexit, that have sparked uncertainty.
She further warned that global trade growth has come to a “near standstill”.
“Even if growth picks-up in 2020, the current rifts could lead to changes that last a generation – broken supply chains, siloed trade sectors, a ‘digital Berlin Wall’ that forces countries to choose between technology systems,” the IMF head added.
Amid rising trade war between the countries which is generally fought through tariffs and counter-tariffs, the chief called for nations to work together and find a lasting solution.
She said: “Everyone loses in a trade war”.
(With agency inputs)