IMF chief says markets have good reasons to be more upbeat on economy

DUBAI (Reuters) – The head of the International Monetary Fund (IMF) said on Monday there is good reason to be more upbeat in financial markets, pointing to the US economy’s chances of avoiding recession and China’s reopening of pandemic controls. Happened.

IMF Managing Director Kristalina Georgieva, speaking at the World Government Summit, described the IMF’s outlook for 2023 as “less bad, not better”, noting that the fund forecast a slowdown in economic growth this year And inflation remains a concern.

Positive factors were the US and EU labor markets, China’s reopening and “surprisingly good results from central banks tightening financial conditions and inflation finally coming down, although the battle is not yet won”, he said. .

Asked whether there would be more doses of monetary tightening, Georgieva said the Fund expected monetary tightening this year, but did not anticipate it would continue into 2024.

“Markets have good reason to be more bullish because what they are finally seeing is the US economy likely to avoid recession…they are reopening China and allowing Chinese consumers to spend the money they saved during the pandemic.” running for.” lockdown,” she said.

The IMF chief was speaking in an interview at the annual summit hosted by Dubai in the United Arab Emirates (UAE).

Georgieva praised Gulf Arab oil and gas producers for pursuing “relentless” fiscal reforms, including diversifying revenue sources by introducing new taxes.

The UAE will host the COP28 climate conference in November.

The designation as COP28 chairman of the country’s climate envoy, who is also the head of a state oil firm, fueled activists’ concerns that big industry was hijacking the global response to the warming crisis.

When asked about the criticism, Georgieva said: “Our focus is on what needs to be done and how we can do it together”.

“We talk about an inclusive approach to fighting the climate crisis. That’s exactly what inclusive is: all hands on deck,” she said. “If we miss our chance to deliver on our promises again, we’re all screwed.”

(Reporting by Ghaida Ghantous, Writing by Andrew Mills and Nayra Abdullah, Editing by Susan Fenton and Alex Richardson)

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