The head of the International Monetary Fund, Kristalina Georgieva, has warned that while the global economy has shown resilience in the face of multiple shocks, growth remains “better than feared but worse than needed.” Speaking at the IMF’s annual meetings, Georgieva called for renewed international cooperation and structural reforms to avoid a prolonged period of sluggish expansion.
Resilience amid uncertainty
The IMF’s latest assessment highlights a world economy that has avoided the deep recession many feared after the pandemic, energy shocks, and inflation surges. Global growth is projected at around 3 percent for 2025—slightly above last year’s level but well below pre-pandemic averages.
Georgieva said the strength of labour markets, falling inflation, and stabilising supply chains have helped sustain momentum. However, she cautioned that the recovery remains uneven, with emerging economies facing tighter financial conditions, weak investment, and elevated debt burdens.
“Resilience is welcome,” she said, “but resilience alone is not enough. We need stronger productivity, fairer growth, and sustained efforts to restore confidence.”
Regional disparities and fragile confidence
Advanced economies such as the United States continue to outperform expectations, supported by robust consumer spending and investment in green and digital sectors. Europe, by contrast, remains weighed down by sluggish industrial output and energy costs, while China faces headwinds from property market weakness and slower domestic demand.
The IMF noted that many low-income nations are struggling to attract investment, with nearly 60 percent facing debt distress or heightened risk of default. This imbalance, Georgieva warned, risks deepening the divide between advanced and developing economies, particularly if global interest rates remain elevated for longer.
Calls for reform and cooperation
The IMF chief urged governments to focus on fiscal discipline, structural reforms, and innovation-led growth rather than relying on short-term stimulus. She also pressed for more coordinated action on debt restructuring and climate financing, warning that political fragmentation and protectionism could undermine collective progress.
Georgieva reiterated the Fund’s call for stronger multilateral support mechanisms and for advanced economies to maintain open trade channels. “Fragmentation makes us poorer and less secure,” she said. “Only cooperation can deliver the growth we need.”
A recovery that still falls short
While the IMF sees no immediate global crisis, the mood at the meetings remained cautious. Inflation is receding but not yet conquered, borrowing costs are high, and geopolitical tensions continue to cloud forecasts.
In Georgieva’s words, the global economy has “proven remarkably resilient—but resilience should not be mistaken for strength.”
Newshub Editorial in Europe – 23 October 2025
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