The IMF chief Kristalina Georgieva on Thursday said that the world economy is expected to grow at less than 3 per cent this year but Asia remains a bright spot with India and China expected to account for half of global growth in 2023.

International Monetary Fund (IMF) managing director Kristalina Georgieva said that the slowdown in the world economy last year due to Covid-19 pandemic and war in Ukraine would continue this year.

The period of slower economic activity will be prolonged, with the next five years witnessing less than 3 per cent growth, “our lowest medium-term growth forecast since 1990, and well below the average of 3.8 per cent from the past two decades,” she said.

“Some momentum comes from emerging economies – Asia especially is a bright spot. India and China are expected to account for half of global growth in 2023. But others face a steeper climb,” she explained.

“After a strong recovery in 2021 came the severe shock of Russia’s war in Ukraine and its wide-ranging consequences – global growth in 2022 dropped by almost half, from 6.1 to 3.4 per cent,” Georgieva said.

She said slower growth would be a “severe blow,” making it even harder for low-income nations to catch up.

About 90 per cent of advanced economies are projected to see a decline in their growth rates this year, she said.

For low-income countries, higher borrowing costs come at a time of weakening demand for their exports, she said.

She also said that while the global banking system had “come a long way since the 2008 financial crisis, concerns remain about vulnerabilities that may be hidden, not just at banks but also non-banks.”

Her comments come in the run-up to next week’s spring meetings of the IMF and the World Bank, when finance ministers and central bankers meet to discuss the challenges confronting the global                                 economy and the best way ahead.