The threat of deglobalization that splits countries into divided blocs could undermine decades of gains in living standards and growth, an IMF official warned Tuesday.
While not an immediate threat “we see this as a serious risk,” IMF chief economist Pierre-Olivier Gourinchas said.
He spoke at the start of the IMF and World Bank Spring meetings, where the Russian invasion of Ukraine hangs over the discussions. The war has reverberated through the global economy, but some officials fear it also could break up years of hard-won gains in integration.
Globalization has “lifted hundreds of millions out of poverty and allowed emerging market economies to see their economies soar in the last 30, 40 years,” Gourinchas told reporters.
“A move towards more fragmentation would undo many of these gains.”
The IMF’s latest World Economic Outlook showed the integrated global supply chain preserved those gains even during the Covid-19 pandemic.
The rise of large emerging markets in the global economy has created a shift towards a “multipolar world,” he said. But splitting into “divided blocs… would be a disaster for the global economy.”
