Global | Geopolitics rules the roost in the Fund

Two weeks ago, the private sector walked away from the annual meeting of the International Monetary Fund in Marrakech less worried than a year earlier, but with three lingering concerns: inflation and interest rates going forward, low global growth and the complex geostrategic environment.

Key points

• Key points:
• There was no news on inflation; bringing it down to 2% was never going to be a quick or smooth process and the battle to bring it down is still uphill. On the monetary policy front, there was widespread relief that the private sector finally seems to understand that interest rates may continue to rise and stay high for quite a while.
• There was also less panic in terms of growth. The US economy remains buoyant, due to enormous fiscal spending and growing levels of consumption amid strong job creation and the use of a large part of the savings amassed post-COVID; patterns that are also partly seen in other countries.
• Global growth is expected to reach 3%, below the historical average, though still strong given the slowdown in emerging countries due to rising interest rates and stagnation in Europe.
• However, the authorities were very concerned about the troubling geostrategic landscape. Russia’s invasion of Ukraine more than a year and a half ago, has become entrenched, the conflict between the United States and China has entered a new phase, with ties being cut left, right and center.
• On top of all this, we have the recent Hamas attacks in Israel and the defensive yet aggressive response of the latter in what is an explosive region. Meeting after meeting, the geostrategic axis as a source of risk has become more dominant in discussions on the global context.

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