Kristalina Georgieva, the World Bank’s CEO, said the global growth is moderating from 3 per cent to 2.9 per cent in 2019. That is still a robust growth performance.
“But what we see happening are troubling signs in terms of international trade and manufacturing activities,” she said.
“In this more challenging environment, there is an urgency for emerging markets and developing economies to get ready to cope with possible turbulence and to build fiscal and monetary space, to build policy buffers,” she said in a conference call with journalists on the occasion of the release of the Global Economic Prospects report.
She said the governments have to concentrate more on their debt management practices, especially in countries where this is already a serious concern.
“They need to use borrowing to fund development needs, to use borrowing for productive purposes and they have to work with creditors on transparency and sustainability of lending practices,” she said.
Georgieva will serve as the interim President of the World Bank after Jim Yong Kim departs the international financial institution on February 1.
Urging countries to accelerate reforms, Georgieva said from the Bank’s perspective, this is particularly critical for investing in human capital, lowering barriers to higher investments and boost positivity and make sure that they are integrated into the world economy in a way that helps them to expand and grow.
One of the issues of concern she said, is that the Bank’s main focus on poverty reduction is correlated to strong, steady, and equitable economic growth.
Noting that the majority of low-income countries would be impacted, she said that they would be hard-hit by a sudden weakening in a trade or by global financial conditions worsening.
“What I mean by that is situations in which financial flows go into the direction of safer locations and that makes both access and costs for countries more difficult, less favourable,” she said.
