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‘Trend of fragmentation is strong’ -Breaking


© Reuters. FILE PHOTO: Kristalina Georgieva (IMF) Managing director attends UN Climate Change Conference, Glasgow, Scotland (Britain), November 3, 2021. REUTERS/Yves Herman

By Dan Burns

DAVOS (Reuters) – Kristalina Georgieva, International Monetary Fund Managing director, said Wednesday that she is less concerned about the possibility of a war in Ukraine or a slowdown in China triggering a global recession and more about the strong trend towards economic and political fragmentation.

Last month the IMF reduced its 2022 global growth forecast to 3.6%, down from 4.4%. It was her second downgrade of this year. She also reiterated that she is concerned about the possibility of additional reductions due to events. Georgieva stated that this isn’t what she cares about at the moment during a panel discussion here at The World Economic Forum.

“What is more concerning is the fact that these downgrades were made, but because 3.6% is the threshold to enter negative territory in the global economy. There is still much to do,” she stated.

She said, “What is more concerning to us?” “We are about to enter a world of more fragmentation with currency and trade blocs that will separate what was until now an integrated global economy.”

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Georgieva’s words echoed the concern that overshadows this week’s delayed reboot at the annual meeting of global business-government leaders in Switzerland Alps. Georgieva said that events such as Russia’s invasion and occupation of Ukraine show that globalization is ending.

Georgieva stated that “the trend towards fragmentation is strong” during the session “An Economic Iron curtain: Scenarios & Their Implications”.

“I was born on the other side the Iron Curtain. It made me miserable. It scared me to death that maybe we are sleepwalking from one hot war into another.