WASHINGTON, Oct 12 – international Monetary Fund (IMF) Managing director Kristalina Georgieva expressed hope on Thursday for a de-escalation of tensions between the United states and China, warning that continued friction between the worldS two largest economies poses a meaningful risk to global economic stability.
georgieva’s comments come amid heightened geopolitical concerns and ongoing trade disputes, raising fears of a slowdown in global growth.The IMF chief emphasized the interconnectedness of the U.S.and Chinese economies, stating that a further deterioration in thier relationship could disrupt supply chains, dampen investment, and ultimately impact global output. “We are hoping to see easing of tensions between the US and China,” Georgieva said during a press conference at the IMF’s annual meetings. “Fragmentation… is a major risk to the world economy.”
The IMF recently lowered its global growth forecast for 2023 to 3.0%, citing factors including the war in Ukraine, high inflation, and tightening monetary policy.Further escalation of U.S.-China tensions could exacerbate these challenges,possibly pushing the global economy closer to recession. According to IMF estimates, a significant decoupling of the U.S. and Chinese economies could reduce global GDP by as much as 2.5% in the long run.
Georgieva highlighted the importance of international cooperation in addressing global economic challenges. She urged both the U.S. and China to prioritize dialog and find common ground, emphasizing that a stable and predictable global economic habitat is crucial for sustainable growth and prosperity. The IMF is actively monitoring the situation and stands ready to provide policy advice and support to its member countries.
