ISLAMABAD
\nInternational Monetary Fund (IMF) chief Kristalina Georgieva warned on Sunday that risks to financial stability had increased and stressed \u201cthe need for vigilance\u201d following the recent turmoil in the banking sector.
\nSpeaking at a forum in Beijing, the IMF managing director said she expected 2023 \u201cto be another challenging year\u201d, with global growth slowing to below 3.0 per cent due the war in Ukraine, monetary tightening and \u201cscarring\u201d from the pandemic.
\n\u201cUncertainties are exceptionally high,\u201d with the outlook for the global economy likely to remain weak over the medium term, she told the China Development Forum.
\n\u201cIt is also clear that risks to financial stability have increased,\u201d she added.
\n\u201cAt a time of higher debt levels, the rapid transition from a prolonged period of low interest rates to much higher rates \u2014 necessary to fight inflation \u2014 inevitably generates stresses and vulnerabilities, as evidenced by recent developments in the banking sector in some advanced economies.\u201d
\nHer comments came after the financial sector was shaken by the collapse of Silicon Valley Bank and the enforced takeover of Swiss bank Credit Suisse by rival UBS, leading to fears of contagion.
\nBank shares tumbled on Friday as fears about the health of the financial sector resurfaced, with German Chancellor Olaf Scholz forced to give reassurances about Deutsche Bank after the long-troubled lender became a focus of investor concerns.
\nGeorgieva said policymakers had acted decisively in response to financial stability risks.
\n\u201cThese actions have eased market stress to some extent, but uncertainty is high which underscores the need for vigilance,\u201d she said.
\nThe IMF chief, however, pointed to China\u2019s rebound as a bright spot for the world economy.
\nThe IMF forecasts China\u2019s economy to grow 5.2pc this year, driven by a rebound in private consumption as the country reopens after its pandemic isolation.
\n\u201cThe robust rebound means China is set to account for around one third of global growth in 2023 \u2014 giving a welcome lift to the world economy,\u201d she said.
\n\u201cA 1.0 percentage point increase in GDP growth in China leads to 0.3 percentage point increase in growth in other Asian economies, on average \u2014 a welcome boost.\u201d
\nGeorgieva urged China\u2019s policymakers to seek to raise productivity and rebalance the economy away from investment and towards more durable consumption-driven growth.
\n\u201cMarket-oriented reforms to level the playing field between the private sector and state-owned enterprises, together with investments in education, would significantly lift the economy\u2019s productive capacity,\u201d she said.<\/p>\n","protected":false},"excerpt":{"rendered":"
ISLAMABAD International Monetary Fund (IMF) chief Kristalina Georgieva warned on Sunday that risks to financial stability had increased and stressed \u201cthe need for vigilance\u201d following the recent turmoil in the banking sector. Speaking at a forum in Beijing, the IMF managing director said she expected 2023 \u201cto be another challenging year\u201d, with global growth slowing […]<\/p>\n","protected":false},"author":2,"featured_media":321994,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[12425,12426],"class_list":{"0":"post-321971","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-world","8":"tag-imf-chief","9":"tag-kristalina-georgieva"},"yoast_head":"\n