Global interest rates expected to decline by mid-2024: IMF chief
Dubai, UAE – The World Governments Summit 2024 (WGS), which is taking place in Dubai, hosted a plenary session featuring Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF).
During the session on the first day of the summit, which was moderated by CNN’S Richard Quest, Georgieva said that global interest rates are expected to decline by 40% by mid-2024. “We are very confident that the world economy is now poised for this soft landing that we have been waiting for,” she said.
Georgieva added, “We have learned through experience that economic fundamentals matter, and in the United States they are strong. The US has deep capital markets; a very dynamic economy, particularly in new technologies; and the ability of its economy to quickly adjust, which is attractive for investments.”
Responding to a question on why the United States has responded so strongly at a time of high interest rates, Georigieva stated, "The United States bene
We are very confident that the world economy is now poised for this soft landing that we have been waiting for KRISTALINA GEORGIEVA
fits from being a source of energy in terms of oil and gas. When the war on Ukraine began, for instance, Europe found itself in a difficult place because it was forced to move away from Russia. The United States did not face this problem at all. It became
an exporter of energy.”
She also cited the American government's support for families and businesses during the pandemic. In doing so, the government ensured that citizens were still able to spend, which kept the demand level and the labour market thriving.
Georgieva praised the UAE’S readiness to use artificial intelligence (AI) technologies and commended the nation for its foresight to establish a ministry for artificial intelligence in 2017 at a time of global reluctance on this matter. Georgieva said, “The shift towards AI will be similar to the Industrial Revolution in terms of scale and significance of impact.”
She highlighted that it will affect up to 40% of the labour market, with new jobs emerging as existing jobs either transform or disappear.
Georgieva stated that an IMF report has revealed the readiness
of the UAE and Saudi Arabia for this transformation, while the majority of countries, primarily developing nations, are not.
“The UAE must now lead the world in the responsible, humanity-serving adoption of AI,” Georgieva stated, while also supporting other countries by investing in developing nations and emerging markets. The aim, she elaborated, is to support them in benefitting from this technology, but also “managing its negative potential consequences.”