The world has changed and economic growth is at risk of slowing since the Hamas attack on Israel, IMF Managing Director Kristalina Georgieva said Friday (Oct. 13) in Marrakech, Morocco. Thousands of journalists, policymakers, bankers and civil society organizations are gathered there for the Annual Meetings of the IMF and World Bank.
“A few days ago, the world has slowed down in terms of growth. Yes, tremendous resilience. But the recovery from the shocks is slow and uneven. Slow because at 3% growth is currently well below the average of the last two decades before the pandemic. And medium term growth prospects are also the weakest in decades. Uneven because the economic scarring from the recent shocks is vastly different across countries,” Georgieva told delegates gathered for the plenary speech of the Annual Meetings.
Delegates held a moment of silence to honor victims of the devastating earthquake that struck Morocco last month. Georgieva said the resilience that the Moroccans have shown in the face of disaster is a lesson to economic policymakers.
“The right policies and reforms are essential. Here in Morocco, in the areas devastated by the earthquake it was the buildings with strong foundations and a solid structure which sustained the shocks best. The lesson is, even if faced with very different, different economic settings, policymakers everywhere need to build strong economic foundations through sound policies,” said Georgieva.
The head of the Fund ended on an upbeat note, saying that a combination of trade growth, international aid finance, domestic revenue mobilization and technological innovation can help replenish global coffers and build buffers to future economic shocks.
“The time has come to restore fiscal space. This means tough decisions for governments by prioritizing spending and with credible medium term fiscal frameworks. It can be done,” the Bulgarian concluded.
A copy of the full transcript is available at IMF.org