The International Monetary Fund (IMF) chief Kristalina Georgieva has said that the world is likely to avoid a recession in 2023. In an exclusive interview with CNBC-TV18 on the sidelines of the G20 meeting in Bengaluru, the managing director of IMF said that the resilience of labour markets and a mild winter in Europe have helped countries in avoiding a recession.

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"Looks like we will avoid a recession. Europe has quickly managed to overcome its dependence on Russian oil and gas. China has opened up and that has created more impetus for growth. India is a bright spot with 15 percent growth coming from India," said Georgieva.

The IMF chief praised India and the Finance Ministry for creating an enabling atmosphere to build consensus and a spirit of collaboration. She added that India must continue with structural reforms, continue on the path of inclusiveness and create more opportunities for women.

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One of the contentious issues at the G20 is debt restructuring to help countries like Sri Lanka and Zambia which are under unsustainable levels of debt.

Commenting on the deliberations, Georgieva said that there was a clear commitment from G20 countries to bridge differences for the benefit of countries which are dependent on debt. She highlighted that a political consensus will be crucial for overcoming differences in global financial architecture.

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Outlook for 2023

Speaking on her economic outlook for 2023, the IMF chief said that the world economy has been resilient but 2023 will be challenging.

"The war in Ukraine is a great source of uncertainty. It is very uncertain how the war will evolve and this can make energy markets anxious. We hope for peace and calm and a stop to the war," she said.

Georgieva also pointed out that natural disasters including earthquakes in Turkey and Syria have shown how governments need to be prepared for the unthinkable.

"We saw natural disasters in all continents in 2022, including earthquakes in Turkey and Syria. We must have a mindset towards building resilience, resilient people who are healthy and educated with strong social protection. We must also build resilience for everyone to prosper and have a resilient climate," she said.

IMF chief on crypto

The IMF MD said that while digital currency was now part of the global economy, there was a need to differentiate between Central Bank Digital Currencies from cryptocurrency and stablecoins which are privately issued. Further, she said that BIS, FSB, World Bank and IMF have all committed to laying the foundations for regulations for cryptocurrencies and stablecoins.

"We must remember crypto assets are not money and cannot be legal tender. If regulations fail, we should not take banning off the table", said Georgieva.

The IMF Chief said that governments should not rule out banning crypto assets if regulations don't work and added that global financial institutions have been slow in making regulations on private cryptocurrencies.

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(Edited by : Abhishek Jha)

First Published:Feb 25, 2023 10:17 AM IST