IMF Chief Says Productivity, Chinese Consumer Spending Key to Boosting Global Growth.

• International Monetary Fund Managing Director Kristalina Georgieva bemoaned the slow pace of global growth on Thursday, saying that Europe needed to do more to boost productivity and China should work to unleash greater consumer spending.
• Georgieva told a news conference during the IMF and World Bank spring meetings in Washington that several factors are converging to hold back growth in Europe and China, from ageing populations to sub-optimal allocations of capital, while the U.S. has far outperformed expectations.
• The IMF on Tuesday forecasted global growth at 3.2% for 2024. This is well below its 20-year pre-pandemic average of 3.8% amid lacklustre performances in Europe and China and the impact of high interest rates and regional wars on developing economies.
• Of note, it boosted its U.S. growth forecast by 0.6% to an above-potential 2.7% for 2024, while cutting the forecast for the eurozone by 0.1% to 0.8%.
• Georgieva said the U.S. has done a better job of harnessing technology innovation and turning it into scalable business activity. The U.S. also benefited from domestic energy production, which has kept energy prices low and immigration, which created an ample labor supply without too much wage inflation.
• Georgieva advocates for fiscal restraint among IMF member countries in light of the COVID-19 pandemic and subsequent economic challenges. She warns against excessive spending, citing heavy debt burdens and the need for fiscal resilience to prepare for future shocks.

(Source: Reuters)