World Bank, IMF spring meetings get underway in complex economic environment

WASHINGTON: The World Bank and International Monetary Fund’s spring meetings got underway yesterday with an ambitious reform and fundraising agenda likely to be overshadowed by concerns over high inflation, rising geopolitical tension and financial stability.

“Growth remains historically weak now and in the medium term,” IMF managing director Kristalina Georgieva said during a speech last week. The fund now expects global growth to fall below three per cent this year, and to remain at close to three per cent for the next half a decade – its lowest medium-term prediction since the 1990s.

Close to 90% of the world’s advanced economies will experience slowing growth this year, while Asia’s emerging markets are expected to see a substantial rise in the economic output – with India and China predicted to account for half of all growth, she said. Low-income countries are expected to suffer a double shock from higher borrowing costs and a decline in demand for their exports, which Georgieva said could fuel poverty and hunger to increase.

This year’s spring meeting will be held against the backdrop of high inflation and ongoing concerns about the health of the banking sector following the dramatic collapse of Silicon Valley Bank. Georgieva told AFP last week that central banks should continue battling high inflation through interest-rate hikes, despite concerns that it could further inflame the banking sector.

Ahead of the spring meetings, the IMF and World Bank also called on wealthier countries to help plug a US$1.6 billion hole in a concessional lending facility for low-income countries that was heavily used during the COVID-19 pandemic.

Many low-income countries are now facing mounting debt burdens due in part to the higher interest-rate environment. World Bank President, Malpass is widely expected to be replaced by US-backed former Mastercard chief executive officer Ajay Banga, who was the only person nominated for the position. State Minister of Finance Shehan Semasinghe is representing Sri Lanka at the event