Bulgarian economist named new IMF chief

A Bulgarian economist who grew up when her country was a communist nation has been selected to be the next leader of one of capitalism's premier institutions, the 189-nation International Monetary Fund.

Kristalina Georgieva, a top World Bank official, was chosen by the IMF's executive board on Wednesday to become the fund's managing director.

She succeeds Christine Lagarde who is stepping down to take over as head of the European Central Bank.

The IMF is the world's lender of last resort, providing emergency loans when countries are facing financial crisis.

Georgieva takes over at a time when the global economy is slowing and the two biggest economies, the United States and China, are engaged in an escalating trade war.

The troubles have raised worries that the global economy could dip into a recession.

Last year, Argentina was forced to seek a $US57 billion ($A84 billion) bailout package from the IMF, the largest in the institution's history.

Speaking to reporters after the IMF's 24-member board approved her nomination, Georgieva cited a host of challenges, from disappointing global growth, to trade tensions and high debt burdens in many countries.

"Warning signals are flashing and we must be ready to be tested," she said.

"My immediate priority for the IMF is to help members minimise the risk of crises and be ready to cope with downturns."

Georgieva, who will take over at the IMF on October 1, is the fund's first leader to come from an emerging market economy rather than one of the traditional European economic powers such as Germany or France.

David Malpass, a Trump administration official, was chosen this year to lead the World Bank, continuing a seven-decade tradition in which the head of the World Bank has always been an American and the head of the IMF has been from a European country.

Georgieva, 65, had held the No. 2 post at the World Bank since early 2017 and gained praise for her efforts to win approval of a $US13 billion capital increase for the bank, along with a reform package that seeks to decrease the bank's lending to wealthier developing countries, such as China, a key goal of the Trump administration.

Deputy IMF Managing Director David Lipton, who has been leading the IMF on an acting basis, said in an interview with Bloomberg Radio on Wednesday that the fund's Argentina program will likely be on hold for some time as the country deals with severe political and economic uncertainty.

When Lagarde, then the French finance minister, became the first woman to head the IMF in 2011, the institution was facing a number of challenges including a sex scandal that had forced her predecessor, Dominique Strauss-Kahn, to step down.

In July, she was nominated to succeed Mario Draghi as head of the ECB, the central bank for the 19 European nations use the euro currency.

Austrlaian Associated PressBack to Breaking News

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