Be pragmatic & collaborate, fragmentation will cost 7% of global GDP: IMF chief

International Monetary Fund (IMF) Managing Director Kristalina Georgieva on Friday asked the world to be pragmatic and collaborate and said that fragmentation could cost up to 7 per cent of the global GDP. 

“If we don't unite now, we’ll face significant risk to the economy and people’s well-being,” said Ms Georgieva during a session on global economy on the last day of the World Economic Forum (WEF) Annual Meeting 2023. 

The IMF chief said that if we looked at medium-term growth prospects, how we handled the supply chain issues would decide our future prospects. She added that her message to the world was to “be pragmatic and collaborate”. 

Asked what would take the IMF to upgrade its global growth forecast, she said: “Last year, we downgraded the growth projections three times and not downgrading further itself is good news at the moment.” 

The labour market needs to be looked at seriously, as for anyone, having a cost of living crisis and a job was much better than having no cost of living crisis and no job, she said. 

“2022 was a weird year. There was no growth engine. But some things must be improving now or at least it has not been as bad as feared,” ECB President and former IMF chief Christine Lagarde said. 

China was now emerging again and that would be positive for the rest of the world also, though that might lead to some inflationary pressures, she added.

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