February 27, 2025
Cape Town, South Africa: Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), spoke at the first meeting of the G20 Finance Ministers and Central Bank Governors in Cape Town. She expressed gratitude to the Government of South Africa for hosting the event and acknowledged Minister Godongwana and Governor Kganyago for their leadership.
Georgieva highlighted a shared concern among participants about the need to boost global growth amid limited macroeconomic policy space and heightened uncertainties. "I see important opportunities to advance the reforms needed to deliver lasting global economic prosperity," she stated.
The IMF projects global growth at 3.3 percent for this year and next, which is steady but below historical averages amidst high public debt levels. Georgieva noted that growth is stronger in the U.S., while it picks up more gradually in the EU than previously expected. Emerging markets are projected to match last year's performance.
The disinflation process continues globally, with labor markets cooling and energy prices expected to decline further. However, there remains uncertainty regarding economic policies as governments shift priorities. Significant policy changes in areas like trade, taxation, public spending, immigration, and deregulation have implications worldwide.
Georgieva identified risks diverging across economies. While there is some upside potential in the U.S., overall risks remain on the downside for most other economies.
To address low growth prospects, Georgieva emphasized crafting policies that provide a strong foundation for higher growth. Macroeconomic stability must be preserved while managing pressures such as short-term risks and rebuilding buffers.
Central banks should focus on restoring price stability while supporting activity and employment. Fiscal measures should aim at sustainable public debt paths by mobilizing domestic revenues and promoting efficient spending.
Countries should pursue ambitious reforms to lift productivity through supply-side policies like cutting red tape and encouraging entrepreneurship.
Georgieva stressed that cooperative actions are vital alongside domestic reforms. External support can help countries implement necessary changes through capacity development and concessional support.
Addressing debt challenges is urgent; some countries may need restructuring while others face high interest payments hindering future investments. Improving predictability in restructuring processes is essential.
The IMF will continue providing policy advice, capacity development, lending where relevant, and supporting international efforts on debt challenges through initiatives like the Global Sovereign Debt Roundtable.
"We remain committed to helping our member countries achieve greater prosperity and stability," concluded Georgieva.