World Bank’s Marcelo Giugale on global risks, SA economic outlook

In a recent interview with CNBC Africa's Aviwe Mtila, Marcelo Giugale, Director of the Financial Advisory and Banking Department at the World Bank Treasury, shared insights on global risks and the role the World Bank could play in assisting countries like South Africa in overcoming economic challenges. Addressing the audience at the GEPF Thought Leadership conference, Giugale highlighted the importance of effectively managing funds to benefit not only the fund's contributors and beneficiaries but also the broader African community. Emphasizing the need for strategic investments that generate employment and foster technological advancements, Giugale underscored the critical role of transparent and impactful resource management in driving economic development. With regards to global risks, Giugale pointed out several key concerns that countries need to address to ensure economic stability and growth. The impending increase in interest rates, the possibility of a trade war, rising global debt levels, and the persistent threat of climate change were identified as significant challenges that require prompt and effective action. Giugale stressed the importance of preparing for interest rate hikes and managing borrowing costs, while also advocating for policies that promote global trade and mutual economic prosperity. Additionally, he highlighted the necessity of fiscal discipline and sustainable debt management to mitigate the adverse effects of excessive borrowing. Recognizing the urgent need for climate change adaptation and mitigation strategies, Giugale affirmed the World Bank's commitment to supporting countries in enhancing their resilience to environmental risks. Moreover, he discussed the importance of social solidarity and equitable economic policies in fostering sustainable development. Giugale commended countries that have successfully balanced economic discipline with social support programs, noting that a combination of market efficiency and social equity is essential for long-term progress. By leveraging technology to target social assistance to individuals in need, countries can enhance the effectiveness of welfare programs while ensuring fiscal responsibility. In response to South Africa's recent technical recession, Giugale outlined the World Bank's approach to assisting countries facing economic challenges. Offering expertise in fiscal management, market regulation, and sustainable borrowing practices, the World Bank aims to help countries strengthen their economic foundations and attract investment. Moreover, Giugale highlighted the World Bank's decades-long experience in supporting socially inclusive economic reforms, emphasizing the importance of protecting vulnerable populations during periods of economic transition. By fostering a national consensus on the need for both economic efficiency and social welfare, the World Bank continues to play a pivotal role in promoting sustainable development and poverty reduction across the globe.