Slow growth and US elections mark IMF and World Bank meetings

IMF will make adjustments to economic outlook

The IMF will update its global growth forecasts on Tuesday. Last week, IMF Managing Director Kristalina Georgieva pointed out some unflattering prospects arguing that the world, weighed down by high debt, was heading towards slow growth in the medium term, and said it predicted a “difficult future.”

Still, Georgieva said she was “not overly pessimistic” about the outlook, given pockets of resilience, located primarily in the United States and India, that are offsetting persistent weakness in China and Europe.

Although debt defaults among poor countries may have peaked, participants at the annual meetings are expected to discuss the growing problem of liquidity shortages that is forcing some emerging markets burdened by high debt-servicing costs to delay development investments as foreign aid is reduced.

Last year’s IMF and World Bank annual meetings began in Morocco as the Palestinian militant group Hamas attacked Israel, killing more than 1,200 people, triggering retaliation that left more than 40,000 dead in Gaza, according to reports. Palestinian health authorities.

Economic damage has been largely limited to economies located in or adjacent to the conflict: Gaza, the West Bank, Israel, Lebanon, Egypt and Jordan.

“If there was an escalation that endangered oil and gas supplies, it could have much more significant repercussions for the global economy,” Georgieva told Reuters in an interview.

Support for Ukraine

Support for Ukraine will also be a major topic at the meetings, as the wealthy G7 democracies aim to reach a political agreement before the end of October on issuing a $50 billion loan to the Eastern European country backed by frozen Russian sovereign assets. The loan is partly seen as a financial bulwark against a Trump victory next month, as the former US president has threatened to “leave Ukraine”.

Despite the climate of unease, World Bank and IMF leaders intend to spend the week focused on the work at hand at the meetings, which coincide with the 80th anniversary of the founding of the Bretton institutions. Woods, New Hampshire, in 1944.

For World Bank President Ajay Banga, that means finding ways to accelerate project preparations to utilize the bank’s expanded lending capacity and refine the new scoring system aimed at improving development outcomes.