## The Path to Growth

_IMF News, April 13, 2023_

## Source details

**Canonical URL:** [The Path to Growth](https://www.imf.org/en/news/articles/2023/04/13/sp-041323-md-the-path-to-growth)

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## Bibliographic details
- Published: April 13, 2023

---

### Overview
- Speech: "The Path to Growth: Opening Remarks for the Spring Meetings Press Conference by Kristalina Georgieva, IMF Managing Director"
- Location and date: Washington, DC, April 13, 2023
- Key framing: world economy resilient to multiple shocks but facing a combination of weak growth and sticky inflation; "the weakest medium-term forecast in decades."

### Global outlook and risks
- World Economic Outlook projection: global growth to slow down to 2.8 percent in 2023 and remain weak, at around 3 percent, over the next five years.
- Underlying inflation "remains stubbornly high."
- Geo-economic fragmentation affects trade and capital flows; downsides risks have increased.
- Recent banking sector pressures have made fighting inflation and safeguarding financial stability more complex.
- Low-income countries face high debts and lagging per capita income growth, making convergence harder.

### Three priorities on the path to growth
- Restore price stability and safeguard financial stability
  - Central banks expected to "stay the course in the fight against inflation—holding a tight stance to prevent a de-anchoring of inflation expectations."
  - Fiscal policy: "Further effort to reduce budget deficits is critical to support the fight against inflation and reduce debt, but this must be coupled with targeted support for the most vulnerable."
  - Financial stability: central banks should address risks where they emerge, coordinating with regulators and supervisors; monitor risks in banks, non-bank financial institutions, and sectors such as commercial real estate.
- Rebuild the foundation to sustain future prosperity by advancing structural transformations and countering fragmentation
  - Priorities: accelerate the digital revolution, improve the business environment, boost human capital and inclusion, and pursue the green energy transformation.
  - Investment need: "An estimated $1 trillion a year is needed for renewable energy alone."
  - Costs of fragmentation: long-term cost of trade fragmentation could be as high as 7 percent of global GDP; "If we add technological decoupling, some countries could lose up to 12 percent of GDP."
  - Fragmentation of capital flows, including foreign direct investment, would further hit global growth.
- Solidarity with the most vulnerable countries
  - IMF financing since the start of the pandemic: "nearly $300 billion in new financing for 96 countries—more than half our members."
  - Recent approvals: "Just in the six months since our Annual Meetings our Board has approved 23 new arrangements."
  - "Nearly half of our financing commitments in the past three years have been done through our precautionary facilities—like the one approved for Morocco last week."
  - Support has been stepped up for vulnerable middle-income countries, including through a temporary increase in the amount members can borrow from the IMF.
  - Recent financing to countries such as Sri Lanka and Ukraine.
  - New tools: Food Shock Window (helps cope with economic consequences of Russia’s war in Ukraine) and the Resilience and Sustainability Trust (focused on long-term challenges such as climate change).
  - RST uptake: "Five countries are already benefitting from RST support, with many more in the pipeline."

### IMF-led multilateral efforts and debt treatment
- Global Sovereign Debt Roundtable (co-chaired by IMF, the World Bank, and India as G20 Chair) is advancing restructuring cases, including under the G20’s Common Framework.
  - Recent outcomes:
    - Agreement to improve information sharing on macroeconomic projections and debt sustainability assessments at an early stage in the debt restructuring process.
    - Common understanding on the role that MDBs can play, "notably through the provision of positive net flows of concessional finance."
    - Decision to pursue a workstream, including a workshop in the next weeks, on how to assess and enforce comparability of treatment.

### Resource needs and recent pledges
- Appeal for PRGT funding: called for "$4.7 billion in loan resources and $1.6 billion in additional subsidy resources to maintain this interest-free support."
- Recent pledges/contributions: "Ireland, Japan, Portugal, Saudi Arabia and the UK" have come forward with substantial new pledges or contributions.
- Call to members to complete the review of quotas "so that we can continue to strongly fulfill our mission."

### Closing
- Emphasis on continuing work "this week, and beyond" and confidence in overcoming challenges together.

*Source: "The Path to Growth: Opening Remarks for the Spring Meetings Press Conference by Kristalina Georgieva, IMF Managing Director", Washington, DC, April 13, 2023.*

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## References

- [The Managing Director's Global Policy Agenda, Spring Meetings 2023: Safeguard Economic Stability, Support Vulnerable Countries, Sustain Our Future Prosperity](https://www.imf.org/en/Publications/Policy-Papers/Issues/2023/04/12/The-Managing-Director-s-Global-Policy-Agenda-Spring-Meetings-2023-Safeguard-Economic-531906)
- [https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva](https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva)
- [Ukraine and the IMF](http://www.imf.org/external/country/UKR/index.htm)
- [Saudi Arabia and the IMF](http://www.imf.org/external/country/SAU/index.htm)
- [Sri Lanka and the IMF](http://www.imf.org/external/country/LKA/index.htm)
- [Speeches](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [Spring Meetings](https://meetings.imf.org/en/2023/Spring)
- [World Economic Outlook](https://www.imf.org/en/Publications/WEO/Issues/2023/04/11/world-economic-outlook-april-2023)
- [one approved for Morocco last week](https://www.imf.org/en/News/Articles/2023/04/03/pr23104-imf-executive-board-approves-two-year-billion-flexible-credit-line-arrangement-for-morocco)
- [Sri Lanka](https://www.imf.org/en/News/Articles/2023/03/20/pr2379-imf-executive-board-approves-under-the-new-eff-arrangement-for-sri-lanka)
- [Ukraine](https://www.imf.org/en/News/Articles/2023/03/31/pr23101-ukraine-imf-executive-board-approves-usd-billion-new-eff-part-of-overall-support-package)
- [Food Shock Window](https://www.imf.org/en/News/Articles/2022/09/29/pr22327-imf-managing-director-creation-new-food-shock-window-help-countries-address-food-insecurity)
- [Resilience and Sustainability Trust](https://www.imf.org/en/News/Articles/2022/10/12/pr22348-md-announces-operationalization-of-rst)
- [Global Sovereign Debt Roundtable](https://www.imf.org/en/News/Articles/2023/04/12/pr23117-global-sovereign-debt-roundtable-cochairs-press-stmt)
- [key players met yesterday](https://www.imf.org/en/News/Articles/2023/04/12/sp041223-md-lics-concessional-financing)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2023/04/13/sp-041323-md-the-path-to-growth_