Due to the increasing tensions between different countries in the world along with the ongoing conflict, the world economy is at risk of slowing down growth and getting trapped in a debt quagmire. This was warned by the head of the International Monetary Fund, Kristalina Georgieva, on Thursday. She said that the current situation is affecting the whole world. According to PTI news, Georgieva urged the leaders of China to take more decisive steps to bring their country's slowing economy back on track, otherwise, there is a risk of the economic growth rate going down.

It's time to be worried

According to the news, International Monetary Fund (IMF) MD Georgieva said during the meeting of the IMF and World Bank that this is a time to worry. IMF has projected the global growth rate to be 3.2 percent this year, which is low. She said that global trade remains weak with conflict and increasing global tension. This tension also includes bad relations between the world's two largest economies - America and China. Trade is no longer a powerful engine of growth. We are living in a more divided global economy.

Jobs will decrease with income.

She also said that many countries are struggling with the debts they took to deal with the Covid-19 pandemic. According to the IMF, this year government debt around the world will reach above $100,000 billion. This will be equal to 93 percent of global economic output. At the same time, it can reach 100 percent by the year 2030. Georgieva said that the global economy is in danger of getting stuck in a low growth rate, and high debt quagmire. That is, jobs will decrease along with income.

The economic backdrop is not entirely bleak.

Georgieva also said that even then, the economic background is not completely disappointing. The IMF says that the world has made a lot of progress in controlling inflation. She said that other steps including high interest rates by the Federal Reserve and other central banks have played an important role in controlling inflation. According to Georgieva, the International Monetary Fund estimates that inflation in developed countries will come down to around two percent next year, which is in line with the target of many central banks.