IMF SEES SLOWDOWN OF ECONOMIC ACTIVITY, LABOUR MARKETS SOFTENING

WASHINGTON, Oct 16 (Bernama-Sputnik/RIA Novosti) -- The International Monetary Fund sees a slowdown of economic activity and softening of labour markets across the world, IMF Managing Director Kristalina Georgieva said on Thursday, reported Sputnik/RIA Novosti.

"The front-loading of investment and trade ahead of higher tariffs has boosted global growth in the first half of the year. As these temporary effects fade, activity is slowing, and labour markets are softening. Global growth is now expected to slow to 3.2 per cent this year, from 3.3 per cent in 2024," Georgieva said in a Global Policy Agenda report.

Georgieva added that inflation is expected to decline globally with notable variation across countries.

"Previously muted pass-through of tariffs to US consumer prices appears increasingly likely. In contrast, much of the rest of the world is facing an adverse demand shock that is keeping inflation subdued," she said.

Georgieva urged central banks to preserve price stability in line with their mandates. She also called on policymakers to act decisively to unlock private sector-led growth.

An increase in protectionist measures and labor supply disruptions could affect global economic growth, she added.

"Uncertainty has elevated risks to the outlook. Further rise in protectionism and labor supply disruptions could weigh on growth." 

She pointed out that rising geopolitical risks and domestic polarisation highlight the need for a risk-management approach to policymaking.

"Ongoing wars and armed conflicts continue to impose a heavy human and economic toll, further amplifying uncertainty," she added.

However, Georgieva pointed out, major policy shifts in areas like trade, digital money, immigration and national security, also provide opportunities. This includes building more resilient supply chains and diversifying trade relationships, the IMF chief stated.

--BERNAMA-SPUTNIK/RIA NOVOSTI