On Sunday, the director of the International Monetary Fund (IMF, the body that oversees global financial stability), Kristalina Georgieva, in an interview with Face The Nation, a television show on CBS, said from an economic perspective 2023 will be “tougher than the year that we are leaving behind” and the IMF believes that “a third of the world economy will be in recession”. The cause will be the slowdown in the world’s major economies, the United States, China and the European Union.
IMF FORECAST 2023: “We assume that a third of the global economy will be in recession,” says IMF Managing Director Kristalina Georgieva @margbrennan. But a strong US job market could help the world weather a difficult year, she says. pic.twitter.com/Vbhj478pFo
— Face The Nation (@FaceTheNation) January 1, 2023
The IMF, as well as other international economic institutions, have long maintained that global economic growth will be very limited in 2023 and could be a tougher year than 2021 and 2022. The main reasons concern the war in Ukraine, which was provoked, among other things, by a severe energy crisis in Europe and rising inflation in the West, which prompted central banks to raise interest rates, thereby affecting growth.
Added to this is the likely slowdown in the Chinese economy, caused in part by the severe wave of infections that set in after the sudden end of government restrictions. It’s not yet clear how badly the infections will affect the economy or how bad China’s situation is, but Georgieva says China’s growth in 2023 may not outperform the global growth average for the first time in 40 years.
In October, the IMF had lowered its forecast for global GDP growth to 2.7 percent from 2.9 percent: this is the lowest figure since 2001, excluding the 2008 financial crisis and the 2020 crisis caused by the pandemic Italy according to the IMF, will enter a recession in 2023 and its GDP will fall by 0.2 percent.
Our new growth forecasts: 3.2% in 2022, unchanged from July, but now cut to 2.7% in 2023.
We face major challenges: rising risks of recession, cost of living crisis, food crisis, Russia’s war in Ukraine. Politicians need a steady hand to avoid missteps. https://t.co/wDLbkYD8ik pic.twitter.com/XDtW4qI3Zm
— Kristalina Georgieva (@KGeorgieva) October 11, 2022
Recently, Georgieva wrote on Twitter that “2023 will be a difficult year for the world.”
2023 will be a difficult year for the world. The silver lining is that we can use it to transform economies and accelerate changes that are good for our climate and good for growth. At the IMF, we recognize our responsibility to be a force for good. Watch the event: https://t.co/Yv1TvfCytH pic.twitter.com/lsrXDDLNyy
— Kristalina Georgieva (@KGeorgieva) December 29, 2022