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By Dan Burns
DAVOS, Switzerland (Reuters) – Worldwide Financial Fund Managing Director Kristalina Georgieva on Wednesday mentioned she worries much less concerning the threat that the conflict in Ukraine and an extra slowdown in China would possibly set off a worldwide recession than she does concerning the energy of the development towards financial and political fragmentation.
The IMF final month slashed its world development outlook for 2022 to three.6% from 4.4%, the second downgrade this 12 months, and he or she repeated her warning that occasions since then could immediate further cuts to the forecast. That, nevertheless, just isn’t what weighs most on her thoughts at current, Georgieva mentioned throughout a panel dialogue on the World Financial Discussion board right here.
“What worries us extra just isn’t the truth that we had these downgrades, as a result of from 3.6% to get into adverse territory for the world economic system, there’s a lengthy approach to go,” she mentioned.
“What worries us extra,” she continued, “is the chance that we’re going to stroll right into a world with extra fragmentation, with commerce blocs and foreign money blocs, separating what was so far nonetheless an built-in world economic system.”
Georgieva’s remarks echoed a distinguished concern overhanging this week’s delayed reboot of the annual gathering of worldwide enterprise and authorities leaders within the Swiss Alps: That occasions like Russia’s invasion of Ukraine is indicative that the period of globalization that had prevailed for the previous three many years is on its final legs.
“The development of fragmentation is robust,” Georgieva mentioned throughout a session titled “An Financial Iron Curtain: Situations and Their Implications.”
“I used to be raised on the opposite aspect of the Iron Curtain. I hated it. And I can inform you it scares me that we perhaps we’re sleepwalking after the new conflict into one other chilly conflict.”
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