IMF Managing Director: Global economic outlook still faces high uncertainty

New York, September 1 (Xinhua) — International Monetary Fund (IMF) Managing Director Georgieva said in her speech at the G20 Finance Ministers and Central Bank Governors Meeting on September 1 that the expected global economic growth rate of 3% this year is due to a serious divergence in growth, and the growth prospects still face high uncertainty. The rise in bond yields of developed economies has pushed up global interest rates, which is worrying.
Georgieva said that the proportion of global public sector debt to gross domestic product (GDP) is close to 100%, which has exceeded the post World War II high and is expected to further rise. The process of inflation decline in many countries has stalled, and the increasing fiscal pressure is pushing up core bond yields. The mutual influence of fiscal and monetary policies is causing market concerns. Finally, the future impact of artificial intelligence on productivity and financial stability remains unknown.
Georgieva said that the continuous rise in global interest rates is particularly concerning. The bond yields of major developed economies have risen to multi-year highs, driving up global financing costs. Although the interest rate differential between some emerging markets and developed economies has narrowed, this benefit has been offset by the increase in financing costs brought about by the rise in global benchmark interest rates.
At the same time, the external financing environment for developing countries has further tightened. The combination of reduced financing, rising borrowing costs, and increased debt refinancing pressure has further squeezed the funding space for infrastructure, healthcare, and education in many developing countries, especially low-income countries.