Daniel Leigh, who heads the World Economic Studies division in the Research Department of the International Monetary Fund (IMF), speaks in an interview with Xinhua during the IMF and World Bank Spring Meetings week in Washington, D.C., the United States, April 11, 2023. (Xinhua/Zhang Mocheng)
Geoeconomic fragmentation is a rising challenge to the world economy, which is at a highly uncertain moment, and major countries should find ways of maintaining the strong integration that lifts everybody, an International Monetary Fund (IMF) official said on Tuesday.
"There's the problem of the geoeconomic fragmentation. A number of countries have increased the barriers to trade and technology flows. It's not positive, it's actually going to cost the world about 2 percent (of output)," Daniel Leigh, who heads the World Economic Studies division in the IMF's Research Department, told Xinhua in an interview during the IMF and World Bank Spring Meetings week.
"It's a complex world unfortunately. What we're seeing is many countries becoming more disconnected," he added.
"So there are all these fissures in the world economy breaking the world economy into different blocks. This is one of the major reasons why we need to focus on rebalancing the decisions to avoid the costs," said Leigh.
All the big countries should "find ways of maintaining the strong integration that would lift everybody" and "everybody would benefit from more collaboration," he said.
"It is something we are looking at from our point of view, we try to evaluate the economic costs (of the fragmentation). So that in the end, when the policymakers are weighing up their strategic considerations, they can also look at these costs," said Leigh.
He said there are "a number of areas of common interest where countries can rebuild the trust" such as sovereign debt resolution, climate change mitigation and trade system modernization.
Meanwhile, Leigh said Asia, China in particular, is the bright spot of the world economy.
"Right now Asia is the bright spot of the world economy," Leigh said.
China's economy, in particular, will grow 5.2 percent in 2023 and 4.5 percent in 2024, the IMF projected on Tuesday.
"So this is going to provide a boost to a lot of countries. This is a very positive development" that definitely has positive spillover effects, he said.
The senior economist expressed confidence that the Chinese government is in a better position to navigate its economy through international challenges. ■
Daniel Leigh, who heads the World Economic Studies division in the International Monetary Fund (IMF)'s Research Department, speaks at a press conference in Washington, D.C., the United States, April 11, 2023. (Xinhua/Liu Jie)
