World economy poised for soft landing we've been dreaming for: IMF's Georgieva

LONDON: The International Monetary Fund (IMF) is now "very confident" the global economy will see a soft landing, its managing director Kristalina Georgieva said on Monday, adding that interest rates would start coming down around mid year.

"We are very confident that the world economy is now poised for this soft landing we have been dreaming for," after some of the sharpest interest rate hikes in decades, Georgieva said at the World Governments Summit in Dubai.

On the prospect of interest rates being cut in leading economies like the United States, she added: "I expect to see by mid year interest rates going in the direction inflation has been going on for the last year."


She cautioned to expect the unexpected in the wake of the Covid-19 pandemic and said a prolonged war between Israel and Hamas would impact global economies.

"I fear most a longevity of the conflict because (if) it goes on and on the risk of spillovers go up," the IMF chief said.

"Right now we see a risk of spillover from the Suez Canal," she said referring to recent attacks on ships in the Red Sea.

Meanwhile, the IMF chief also said that Russia's war economy is in for tough times due to the outflow of people and shortages of technology. "I actually think the Russian economy is (in) for very tough times because of the outflow of people and because of the reduced access to technology that comes with the sanctions," Georgieva said. "So although this (IMF's GDP projection of 2.6% for the current year) number looks like a good number, there is a bigger story behind (it) and it's not a very good story."