International Monetary Fund (IMF) Managing Director Kristalina Georgieva remarked on Friday during the World Economic Forum (WEF) in Davos that the economic situation is "less bad than we feared a couple of months ago" but that "does not mean good."
Georgieva pointed out positive signs coming from inflation starting to go down, China easing its COVID-19 restrictions, and labor markets remaining strong. However, she warned the projected growth for the global economy of 2.7% "by far is not fabulous." She admitted that policymakers still cannot predict in what way inflation will decline, how China's growth will impact the prices of oil and the further effects of Russia's invasion of Ukraine.
Georgieva warned that interest rates are "yet to bite" and that "if they bite more severely," unemployment could increase. She noted the importance of staying "in the middle of realism" when it came to expectations and keeping the global economy integrated."
