IMF Managing Director Kristalina Georgieva, in a discussion with Washington Post columnist David Ignatius as reported in an IMF newsletter, pointed out that geopolitical tensions are causing fragmentation, which in turn is harming global growth prospects.

Georgieva highlighted the challenges of navigating a more fragmented and shock-prone world, emphasising the importance of strong economic fundamentals for countries to withstand such shocks. She noted that policymakers need to bolster economic fundamentals by creating “buffers,” such as increasing tax revenues and exercising discipline in public spending.

In addition, Georgieva discussed the recently released IMF World Economic Outlook Update, predicting a “soft landing” for the global economy in 2024, with inflation gradually returning to target without causing a recession. She also touched on topics including the US economy, the potential of AI to enhance productivity, and disruptions in Red Sea trade.

Meanwhile, IMF First Deputy Managing Director Gita Gopinath expressed similar sentiments about fragmentation in an article for Foreign Policy Magazine, advocating strongly for a multilateral rules-based trading system and supporting institutions that foster a brighter, more prosperous future for all.