World Bank Raises Growth Forecasts While IMF Targets Inflation

The World Bank has increased its global growth forecasts for 2023 to 2%, partly thanks to China’s recovery from pandemic blockades. Meanwhile, the International Monetary Fund (IMF) states that the most crucial challenge for central banks is to contain inflation.

Small and medium-sized enterprises (SMEs) should adopt sustainable practices to improve their growth prospects and increase access to financing, says Alejandro Villalobos, Managing Director of North Latam, Cumplo. Meanwhile, Marlene Garayzar, Co-founder, Storicard, addresses financial inclusion and the challenges faced by those who lack access to credit. 

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China’s Recovery Drives Growth Forecasts Upward for 2023

The World Bank is raising its global growth forecasts for this year to 2% thanks in part to the improved outlook for China following the end of the pandemic blockades. China is expected to grow 5.1% this year. However, new challenges could arise in the shape of higher oil prices and a poor perception of banking health following the bankruptcies of several entities. Advanced economies are also doing slightly better than the World Bank forecasted in January. However, the group warned that turmoil in the banking sector and higher oil prices could again put downward pressure on growth prospects later this year. 

IMF Claims Financial Sector Turmoil Has Been Contained

The International Monetary Fund (IMF) argues that the most important battle for central banks must be to contain inflation. While tightening monetary and financial conditions unsettled market stability during the first months of 2023, those risks have been controlled, argued the IMF during its Global Financial Stability Report in Washington, DC. The IMF highlighted that stock markets in developed countries indicate a near pause for rate hike cycles. Markets also seem optimistic regarding inflation.

Why is it Useful for SMEs to Be Sustainable? 

Even the most youngest SMEs should operate under a sustainable model, explains Alejandro Villalobos, Managing Director of North Latam, Cumplo. First, because social and environmental responsibility “should not be an option and, second, because it improves the chances of growth and is a factor that could more easily open the door to financing,” says Villalobos. 

Access to Credit an Obstacle Course

“Financial inclusion is an issue that concerns us all. It is not only part of the agenda of those who offer financial products; in fact, it is a vital concern of governments as well as of any private institution or international financial organization,” writes Marlene Garayzar, Co-founder, Storicard. In this environment, obtaining the benefits of credit can feel practically impossible. A credit system that seems to be governed by exclusive and complex dynamics cannot help to achieve financial inclusion and improve the quality of life for all people. “Today, those who have historically found themselves on the margins of credit lines have the alternative of benefiting from them with the inclusion and accessibility work that fintech companies have carried out since their inception. The goal is that one day everyone can at least have the opportunity to use tools that allow us to dream and hope to grow and live better,” says Garayzar.