Kristalina Georgieva, the managing director of the International Monetary Fund, stated on Thursday that although the global economy has proven to be impressively resilient to numerous shocks, it has yet to overcome a confluence of slow growth and persistent inflation.

Georgieva stated at a news conference at the IMF and World Bank spring meetings in Washington that the 2.8% global growth forecast by the IMF for 2023 “is not enough to bring opportunities to businesses and people around the world, and most worrisome is the projection for weak growth over a longer period of time.”

The IMF on Tuesday warned that a major new flare-up of banking system turmoil that chokes off lending and sparks a rush into safe-haven assets could slam global growth back to 1%, throwing many economies into recession and putting major stresses on emerging market economies.

After recovering from the COVID-19 pandemic and suffering setbacks from high inflation and spillovers from the war in Ukraine, policymakers have two major tasks in the near term – fighting persistent inflation and safeguarding financial stability, Georgieva said.

Both have become more complex due to banking pressures from the failures of two U.S. regional banks and the forced sale of global lender Credit Suisse, she said.

The IMF’s chief economist, Pierre-Olivier Gourinchas, told Reuters on Tuesday that policymakers should not halt their fight against inflation due to financial stability concerns.

Georgieva said vigilance on emerging risks “is absolutely paramount.”

“Central banks should address financial stability risks when they emerge, working closely with regulators and supervisors,” Georgieva said. “The key is to monitor risks that may be hiding in the shadows, in banks and non-bank financial institutions or in sectors such as commercial real estate.”

The IMF has issued its lowest five-year global growth projection since it started issuing such forecasts in 1990, with growth forecast to be 2.8% in 2023 and then hover at about 3% through 2028. Georgieva said this was due to lagging productivity and the potential for fragmentation of the global economy.

The forecasts “are not horrible. We are not in recession,” she said. “In my book we are not in a great place, we see risks increasing, but we have now a track record over the last years of remarkable resilience.”