Gopinath said, in an exclusive interview with Sky News Arabia on the sidelines of the annual meetings of the World Bank Group and the International Monetary Fund in Marrakesh, that “the weakness of Chinese growth is one of the most important challenges facing global growth, as growth is slowing there, and the situation in Beijing could become worse than ever.” Expectations, especially if a crisis occurs in the real estate market.”
The impact of the conflict in Gaza on oil prices
The IMF official also warned that oil prices would be affected by the escalation of events related to the conflict between Israel and Gaza.
“Among the risks facing the global economy are also events related to the conflict between Israel and Gaza, if the matter develops into a regional event, and if oil prices are affected at a time when inflation rates have not declined to their target levels, which may make us think about raising interest rates further,” according to the words of the First Deputy Director General. For the International Monetary Fund, Gita Gopinath.
She also pointed to climate shocks affecting economies around the world.
On the other hand, the First Deputy Director General of the International Monetary Fund, Gita Gopinath, praised the moves of central banks around the world to curb the wave of inflation by raising interest rates.
She said, “Central banks in many countries have taken a sound position… The question asked now is not about raising interest further, but about the extent to which interest will be kept high.”
She continued: “Central banks are expected to keep interest rates high because the battle against inflation has not yet been won. We certainly realize that this is costly for businesses due to interest rates and costly for governments in terms of their borrowing, but we need to slow down the economy somewhat in order to reduce inflation to its target levels.” If we do not take this step, we will end up with a major inflation problem, which will then force us to raise interest rates much more, and that will be a worse situation.”
Saudi Arabia and diversification of the economy
Regarding the Middle East and North Africa region, I expected economic growth to decline significantly this year, compared to last year, and attributed this broadly to oil production cuts made by oil-exporting countries, which affected their revenues, in addition to tightening monetary policies.
In a related context, she confirmed that Saudi Arabia is now embarking on a very major transformation to diversify its economy, within several sectors, not just energy.
She also praised the important reforms in Morocco that were taken at various levels, expecting that economic growth in Morocco will be higher this year compared to last year due to these reforms.
Regarding the conflict in Gaza, she said that it was too early to talk about the economic repercussions, adding, “What is happening in Israel and Gaza is a truly human tragedy. More than 2,000 people have been lost, and we hope that peace will come soon.”
Regarding the impact of the rise in oil on the global economy, she said: “When oil prices were rising by 10 percent, the global domestic product was declining by about 0.15 percent in the following twelve months, and inflation was rising by about 0.4 percent, so there may be an important impact on the global economy.” .
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