US seen as driver of 3pc growth

Strong economic activity in the United States and emerging markets is projected to help drive global growth by about 3 per cent this year, the International Monetary Fund’s chief said yesterday, below the annual historic average and a warning sign about potential lacklustre performances through the 2020s.

“Without a course correction, we are indeed heading for ‘the Tepid Twenties’ — a sluggish and disappointing decade,” said Kristalina Georgieva, the organisation’s managing director, in announcing the economic projection and longer-term outlook.

She said global economic activity is weak by past measurements and debt is up, posing major challenges to public finances in many parts of the world.

“The scars of the pandemic are still with us. The global output loss since 2020 is around $3.3 trillion, with the costs disproportionately falling on the most vulnerable countries,” she said.

The anticipated growth rate of just more than 3 per cent is slightly above last year’s projection. The historic average is 3.8 per cent.

“Global growth is marginally stronger on account of robust activity in the United States and in many emerging market economies,” Georgieva said.

The IMF and fellow lending agency the World Bank will hold their spring meetings next week in Washington, where finance ministers, central bankers and policymakers will discuss the global economy’s most pressing issues. The annual gathering will take place as conflicts threaten global financial stability, including Russia’s invasion of Ukraine and the war between Hamas and Israel in Gaza.