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World Bank Group President Ajay Banga listens during the G-20 Finance Ministers and Central Bank Governors' Meetings at the IMF and World Bank’s 2024 annual Spring Meetings in Washington, U.S., April 18, 2024.

REUTERS/Ken Cedeno

The big challenges facing the IMF and World Bank

As the International Monetary Fund and World Bank spring meetings wrap up Friday in Washington, the two crucial global lenders face a few important challenges in the year ahead. GZERO has been on the ground to bring you the big takeaways.

A tale of two recoveries. The IMF’s global economic outlook is fairly rosy as a whole. Inflation is easing in the US and Europe, and 3.2% growth of global GDP is a respectable clip – especially given recent fears of a recession. The US and Chinese economies are both growing, even if Beijing is still struggling with persistent debt and property market woes.

But the recovery has yet to reach every corner of the globe. One-third of the lowest-income countries are poorer today than in 2019, before the pandemic. And because inflation has pushed up interest rates, the costs of servicing sovereign debt have skyrocketed, an especially heavy burden for lower-income countries. Bringing financial stability to these fragile situations is a key focus for the IMF and the World Bank.

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People gather as they watch from afar after an alleged gang member was killed and set on fire, amid an escalation in gang violence, in Port-au-Prince, Haiti March 20, 2024.

REUTERS/Ralph Tedy Erol

Want to stabilize the world’s worst crises? “Leave your textbook in your drawer.”

Matthew Kendrick spoke with Ghassan Salamé, the former head of the UN Support Mission in Libya, and former UN Deputy Secretary-General Lord Mark Malloch-Brown, as part of a panel at the IMF/World Bank Spring Meetings on Wednesday.

The international community is struggling to address half a dozen conflicts, spanning from the Middle East to Haiti, that often involve institutions poorly equipped to tackle modern problems. But that doesn’t mean they can afford to stop trying; it just means they need to get creative.

“The most urgent need is to bring back humanitarianism as a domain independent from war,” said Ghassan Salamé, the former head of the UN Support Mission in Libya, noting that the basic concerns of food, education, and healthcare must not be held hostage to military objectives. “And you cannot apply it in a selective way. You have to apply it in Ukraine with the same strength you do in Gaza.”

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Students read Koranic verses at a madrasa, or Koranic school, in Dhusamareeb, central Somalia, December 16, 2012.

REUTERS/Feisal Omar

IMF says economic picture is rosy, but how does it look from the bottom?

Inflation looks set to fall globally, and a global recession is unlikely in 2024, according to the IMF’s April update to the World Economic Outlook. That so-called “soft landing” is great news for those in New York or Paris, but what does the picture look like from the most vulnerable economies?

Money has been tight for developing countries in sub-Saharan Africa, in particular, with many over-indebted states are only just returning to capital markets after COVID-19’s economic knock-ons shut them out, and face dim medium-term growth prospects.

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