WASHINGTON - (Xinhua) -- International Monetary Fund Managing Director Kristalina Georgieva on Thursday noted that there has been a "fundamental shift" in the global economy , urging countries to lower inflation rates, institute responsible fiscal policy, as well as jointly support emerging market and developing economies. .

In a brief introductory speech ahead of the 2022 annual meeting of the International Monetary Fund and the World Bank scheduled for next week, she said the global economy is emerging "from a relatively predictable world - with a rules-based framework for international economic cooperation, low interest rates, low inflation ... Towards a more fragile world - witnessing more uncertainty, greater economic volatility, geopolitical conflicts and more devastating and frequent natural disasters.

Emphasizing the urgent need to achieve economic stability, Georgieva pointed out that the global outlook has worsened due to multiple shocks, including the war, stressing that inflation has become more stubborn.

She stated that the International Monetary Fund had already reduced its growth forecast 3 times since last October, to be only 3.2 percent for 2022 and 2.9 percent for 2023, and added that the global institution will reduce the growth rate for next year in its updated economic forecasts to be announced next week.

"We will note that recession risks are increasing," she added. Meanwhile, the International Monetary Fund estimates that countries that represent about a third of the global economy will contract for at least two consecutive quarters this year or next.
"Even if positive growth is achieved, it will appear to be stagnant due to lower real incomes and higher prices," she added.

All in all, the International Monetary Fund projects a global production loss of about $4 trillion between now and 2026. This is the size of the German economy, which is a major setback for the global economy.

The Executive Director of the International Monetary Fund also urged decision makers to stay on the path of reducing inflation and developing responsible fiscal policy that protects the vulnerable without raising the rate of inflation, while calling for joint efforts to support emerging market and developing economies.

"The stronger dollar, exorbitant borrowing costs, and capital outflows dealt a triple blow to many emerging markets and developing economies," she said, noting that the probability of investment inflows from emerging markets during the next three quarters rose by 40 percent, which could pose a "major challenge" to countries. with large external financial needs.

More than a quarter of emerging economies are defaulting or trading at distressed levels; More than 60 percent of low-income countries are experiencing, or are at risk of, a debt crisis.

In light of this, Georgieva urged countries to work together to address issues such as food security, which now affects a staggering 345 million people, and climate change, an existential threat to humanity.

Since the outbreak of the epidemic, the International Monetary Fund has provided 258 billion US dollars to 93 countries. Since the Russia-Ukraine war, it has supported 16 countries with nearly 90 billion US dollars. This is in addition to the historic allocation of SDRs of $650 billion last year.