IMF chief urges reform to tackle ‘weak’ growth rate, ‘significant divergences’ at WEF

A “weak-by-historic-standards” global growth rate and “significant divergence across the world” are two “very serious problems” that need to be tackled imminently, IMF Managing Director Kristalina Georgieva highlighted at a Riyadh summit on Sunday.

Speaking at the World Economic Forum special meeting, the IMF chief said some countries are doing well, but others are “falling behind,” without providing further clarification.

Countries with successful economies, which have sound fiscal policies and responsible management of public finances, are the reasons behind the resilience to “repetitive shocks” following the 2008 global meltdown.

The common framework agreement proposed during Saudi Arabia’s G20 presidency coordinates debt reprofiling and restructuring on a global scale, helping aid fair sharing of the burden.

Georgieva called for a faster delivery of this policy.

The UN financial agency forecasts a 3.2 percent growth in 2024 and 2025, matching the pace of 2023. It called the global economy “surprisingly resilient,” despite interest rate hikes.

Taking Saudi Arabia as an example of a successful implementation of an economic diversification program, dubbed Vision 2030, Georgieva called on more global economies to follow suit.

Reforms that are “mindful of the people,” while maintaining trade and financial flows, are the “transmission lines of prosperity,” the IMF chief added.

“Reforms pay off very, very well. If we can have that leadership strength within countries to do the right thing and across countries to work together, the optimist in the room will say we are right,” the UN official concluded.