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IMF MD optimistic about global economy, anticipates interest rate adjustment

February 13, Colombo (LNW): During the World Government Summit in Dubai, Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), expressed high confidence in the global economy’s trajectory towards a soft landing, Reuters reported.

Georgieva remarked on Monday (12) that following significant interest rate increases in recent times, the world economy is now on track for the long-awaited stabilisation.

“We are very confident that the world economy is now poised for this soft landing we have been dreaming for,” Georgieva asserted, acknowledging the impact of some of the most substantial interest rate hikes witnessed in decades.

Addressing the potential adjustment of interest rates in major economies such as the United States, Georgieva noted, “I expect to see by mid-year interest rates going in the direction inflation has been going on for the last year.”

While expressing optimism, Georgieva also cautioned against unforeseen circumstances, particularly in the aftermath of the COVID-19 pandemic. She highlighted the potential economic repercussions of prolonged conflicts, citing the ongoing tensions between Israel and Hamas as a significant concern.

“I fear most a longevity of the conflict because (if) it goes on and on the risk of spillovers go up,” Georgieva emphasised.

She further noted the current risk of spillover from incidents like the recent attacks on ships in the Red Sea, particularly mentioning the Suez Canal, and underscored the potential for wider ramifications if conflicts escalate unpredictably.

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