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The International Monetary Fund (IMF) cautioned that 2023 will be a more difficult year for most of the global economy because the United States, eu, and Chinese economies all decelerate at the same time. We predict that a third of the global economy will be in recession. Even in countries that are not in recession, it could look like a recession for hundreds of millions of people," said Kristalina Georgieva, head of the IMF.
IMF’s 2023 Economic Predictions
International Monetary Fund (IMF) Managing Director Kristalina Georgieva shared the IMF’s predictions on the U.S., the EU, China, and the world economy in an interview with CBS, aired Sunday. She detailed:
I think we're seeing that in 2023. For most of the global economy, it will be a difficult year, more difficult than the year we are leaving. Why? Because the three major economies, the United States, the European Union, and China, are all slowing down at the same time.
The United States is the most resilient in the world. The United States could stay out of recession. We're still seeing a pretty strong labour market. This is, however, a mixed blessing, because if you have a very strong labour market, The Fed may need to tighten interest rates longer to lower inflation," he said.
'The European Union has been badly affected by the war in Ukraine. Half the EU will go into a recession next year. China will decelerate even further this year,' she said.
In addition, the head of the International Monetary Fund said:
China is facing a challenging year. And this is reflected in negative trends around the world.
'When you look at emerging markets in developing economies, this is even more serious. Why? Because in addition to everything else, they are affected by high interest rates and a rising dollar. For economies that are at a high level, this is devastating," she warned.
With regard to China in particular, georgieva describes: "short-term, bad news. China decelerated significantly in 2022 due to this strict zero COVID policy. For the first time in 40 years, China's growth in 2022 is expected to be equal to or lower than that of the rest of the world. This has not happened in the past."
Noting her hope that the U.S. economy "will not slide into recession in spite of all these risks," the IMF CEO said:
We expect a third of the global economy to be in recession...even in countries that are not in recession, it would look like a recession for hundreds of millions.
Georgieva added that "the world has changed radically," noting that "this is a world more subject to shocks." She said those shocks include COVID, the war between Russia and Ukraine and the cost of living crisis.
"My message [is] does not believe we will return to predictability before COVID-19. More uncertainty, more overlapping crises... we need to get down to work and act more nimbly and prudently," she said.
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