IMF chief expects a greater possibility of ‘soft landing’ for world economy

Slow and uneven recovery from last year’s shocks, according to Kristalina Georgieva

The managing director of the International Monetary Fund (IMF), Kristalina Georgieva, stated on Thursday that she believes there are improved chances for a “soft landing” for the world economy despite rising interest rates.

She said in her speech at the opening of the 2023 IMF Annual Meetings in Abidjan, Ivory Coast, “The world economy has shown remarkable resilience, and the first half of 2023 has brought some good news, largely due to stronger-than-expected demand for services and tangible progress in the fight against inflation.”

“This increases the chances for a soft landing for the global economy.”

A “soft landing” occurs when a central bank rises interest rates excessively, causing the economy to slow down while avoiding a recession. Since last year, many central banks have increased interest rates in an effort to combat rising inflation rates in their respective nations.

“While the recovery from the shocks of the past few years continues, it is slow and uneven,” said Georgieva, stressing that the current pace of global economic growth is still relatively slow and is far lower than the 3.8% average in the 20 years prior to the coronavirus epidemic.

She added, “This loss is unevenly distributed across countries,” quoting the IMF as saying the total cumulative global output loss due to shocks as of this year is $3.7 trillion.