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The gap between Americans' perception of the economy and reality
As the candidates make their final arguments in the 2024 US Presidential Election, the economy is front and center on the minds of voters. Despite all signs indicating stable and above-trend growth in the US, many Americans feel uncertain about how well the economy is doing, said Robert Kahn, Managing Director of Global Macro-Geoeconomics at Eurasia Group. He discussed the gap in US economic perception versus reality with GZERO’s Tony Maciulis at the IMF and World Bank Annual Meetings in Washington, DC, in a Global Stage interview. Kahn noted that heightened political polarization has skewed views of economic performance while lingering geopolitical shocks and high prices add to concerns. Kahn emphasized that there is an element of worry around the “legacy of the pandemic…that Vice President Harris is just really struggling to overcome” even though underlying data proves otherwise. The two also discussed former President Trump's accusations that the Federal Reserve is "playing politics" with interest rates and what the impact would be globally if Trump were, as president, to assert a heavier hand in decision-making at the central bank.
Hot topics at the IMF-World Bank meetings
Delegates at the IMF and World Bank Annual Meetings have been giving rosy outlooks to the press while the cameras are rolling, but GZERO Senior Writer Matthew Kendrick heard a different story in private settings. He told Tony Maciulis that the global outlook depends heavily on US policy continuity — which is highly unlikely under a second Trump administration — and successful efforts in China to revive its own floundering economy.
It’s not all doom and gloom, though. Delegates are eager to point to success stories, including in Ukraine and Sub-Saharan Africa, highlighting how the world’s leading development banks can make a real impact on some of the most fragile economies and vulnerable populations.
Watch to learn more about what Matt heard on the ground.
Watch more from Global Stage.
Global economy at risk if Middle East conflict expands, says World Bank's Ayhan Kose
While the global economy shows signs of growth and decreasing inflation, the near future involves risks, including the escalation in the Middle East impacting oil prices, strained China-US relations, and an increasingly challenging tariff and trade environment, said Ayhan Kose, World Bank Deputy Chief Economist. He discussed the geopolitical tensions influencing the global economy with GZERO's Tony Maciulis at the IMF and World Bank Annual Meetings in Washington, DC, in a GZERO Global Stage interview. Kose also addressed the other major economic gathering happening this week: Russia’s 16th annual BRICS Summit in Kazan, Russia, largely seen as a counterweight to Western-led order. While acknowledging the widening economic and geopolitical divide, Kose emphasized the need for international cooperation. He expressed concern about “the increase in the number of protectionist measures and consequences of that for global trade.” Kose also emphasized the "urgent and important" need for World Bank member nations to continue to support development in poorer countries, a more difficult conversation today as many face their own economic headwinds and the world awaits the results of the 2024 US presidential election.
Ukrainian central bank head Andriy Pryshnyy (right) at the 2024 IMF/World Bank Annual Meetings in Washington, DC. Oct. 23, 2024
Ukraine secures fifth round of IMF funding, but less talk of reconstruction
The International Monetary Fund announced Wednesday that Ukraine had successfully completed the fifth revision of its financing program and will receive $1.1 billion to support its non-military budget. This is a major achievement for Kyiv and has required extensive reforms while at war. It’s a war that has not gone well in the last year to boot, and talk about reconstruction — and the IMF and World Bank’s roles therein — has diminished as a result.
Notably absent from this year’s IMF/World Bank Annual Meetings is a marquee discussion of funding for Ukraine’s reconstruction efforts. IMF Managing Director Kristalina Georgieva wrote that Ukraine’s “recovery is expected to slow amid headwinds from the impact of the attacks on energy infrastructure and the continuing war, while risks to the outlook remain exceptionally high.”
Ukraine’s central bank chief Andriy Pyshnyy emphasized the importance of contingency planning under such circumstances, and continuing reforms even if the military situation worsens. Ultimately, they will help Ukraine meet the standards necessary to join the EU — and Kyiv sees greater integration with the West as the best, if not only, way to achieve long-term security.
“Uncertainty is our new reality,” said Pyshnyy at a press event on Wednesday. He credited the IMF’s responsiveness and his own staff’s grit in helping the country overcome panic and anxiety when Russia invaded, and he has set in motion plans to increase the country’s financial resilience.
Maintaining public confidence in the banking system by making sure everyone can access their money when they need it is crucial to keeping the Ukrainian economy afloat. Ukraine’s banks are now capable of functioning in blackout conditions, which has prevented panic withdrawals. The violence has also left many Ukrainians disabled, which has led to changes Pyshnyy said he hopes will lead Ukraine’s “financial system to be the most accessible in the world.”
“We believe in our victory,” said Pyshnyy. “We believe that tomorrow can be better than today.”