Advanced economies will be back on track by 2024, but developing economies will be 5% below where they would have been otherwise, IMF’s Gita Gopinath said on Wednesday. Economies worldwide have been adversely impacted by the coronavirus pandemic and are slowly coming back into the recovery path. The First Deputy Managing Director of the International Monetary Fund said the war in Ukraine has been a major setback to the global recovery.

“We had a serious downgrade to the global growth rate and the world continues to face headwinds because we have a cost of living crisis. Prices of commodities, including fuel and food, are going up around the world,” she said.

Gopinath said central banks are trying to tackle this high level of inflation and are raising interest rates sharply, which they need to do, but that will also have consequences for global finance and trade.

She was speaking at a special session on ‘What next for global growth?’ during the World Economic Forum Annual Meeting 2022. Gopinath said there are very divergent recoveries around the world.