The Strategist

IMF Head: World economy lost $3.7 trillion in 2020-2023

10/06/2023 - 03:33

According to Kristalina Georgieva, the chief of the International Monetary Fund (IMF), the loss of global production from 2020 to 2023 will be $3.7 trillion. She claimed that the United States was the only nation that had been able to restore its economy to its pre-pandemic level.

IMF Photo/Cory Hancock
IMF Photo/Cory Hancock
"Economic fragmentation poses a threat to further erode economic prospects, particularly for emerging and developing economies, including here in Africa," said Georgieva during her speech in Côte d'Ivoire. According to her, divergence is influenced by disparities in "policy space and macroeconomic fundamentals" and is dependent on imported food and fuel.

The allocation of nations' quotas for borrowing from the fund is the IMF's primary mechanism, and modifications to this system are expected to be approved in December. 

Developing nations have been seeking a reform of the quota formula, which now takes into account the size of GDP (at buying power parity) and a number of other factors, such as the degree of market openness and the quantity of reserves. If the methodology for allocating quotas is changed and reallocated in accordance with GDP, the US share would decrease from 17.43% to 14.8%, while China's quota would increase from the current 6.4% to 14.4%.