International Monetary Fund (IMF) President Kristalina Georgieva said she was very confident of a soft landing in the global economy and predicted that the rate cut would begin around the middle of this year.
According to Reuters, Georgieva said at the 2024 World Government Summit (WGS) in Dubai, the United Arab Emirates, on the 12th (local time), “I am very confident that the global economy is ready for the soft landing that we dream of.”
Regarding the prospect of interest rate cuts in large economies such as the United States, Georgieva said, “It is expected that interest rates will also proceed in the direction of inflation over the past year until the middle of this year.” As prices have entered a calm phase, interest rates are also expected to come down.
However, she expressed concern that unexpected health problems after the COVID-19 pandemic or prolonged genocide by Israel against the people of Palestine could affect the global economy.
“If the conflict persists, the risk of spillover increases, so we are most concerned about the prolonged conflict,” she said. “We are now seeing the danger of appearing in the Suez Canal,” referring to the recent commercial attack by Yemen’s pro-Iran Houthi rebels on the Red Sea.
“If there are unintended consequences about where the fight goes, it could be even more problematic for the world as a whole,” Georgieva said.
On the previous day, she also expressed concern about the genocide by Israel, saying, “If the conflict spreads due to the decrease in logistics and the increase in transportation costs in the Red Sea, the economic damage will increase.”