The World Bank’s CEO Kristalina Georgieva has said, in this more challenging environment, developing economies like India, must get ready to cope with possible turbulence and to build fiscal and monetary space, to build policy buffers. She also said that the growth of the global economy is expected to slow to 2.9 percent in 2019 compared with 3 percent in 2018. She said that is still a robust growth performance. But she added ‘what we see happening are troubling signs in terms of international trade and manufacturing activities.’
Georgieva has stated that the governments have to concentrate more on their debt management practices, especially in countries where this is already a serious concern. She also noted that they need to use borrowing to fund development needs, to use borrowing for productive purposes and they have to work with creditors on transparency and sustainability of lending practices. Urging countries to accelerate reforms, she said that from the Bank's perspective, this is particularly critical for investing in human capital, lowering barriers to higher investments and boost positivity and make sure that they are integrated in the world economy in a way that helps them to expand and grow.
The World Bank’s CEO further said that “when growth softens, we are likely to see either stalling or even reversal of poverty reduction. We are also concerned about debt levels and especially debt levels in low income countries where during the period of time of low interest rates, there had been a build-up of debt and now debt service is eating into the government revenues making it more difficult to fund essential social services.” She also noted that the majority of lowest-Income countries would be hard-hit by a sudden weakening in trade or by global financial conditions worsening.
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