Monday, February 6, 2023

IMF yet to observe the effects of financial tightening on unemployment

IMF Chief Kristalina Georgieva has warned that central banks still have some way to go in their inflation battle, as global growth is expected to slow further this year due to higher interest rates. Despite strong labor markets, Georgieva cautioned that tightening financial conditions could lead to tensions between employers and workers.

Governments have provided policy support, but this is shrinking. The IMF expects the global slowdown to bottom out by the end of the year and for the world economy to trend towards a higher growth trajectory in 2024. Georgieva also noted that China needs to “stay the course” in reopening from its Covid-19 restrictions, and that the US could avoid a recession.

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