The International Monetary Fund (IMF) has warned that 2023 will be a difficult year for most countries due to the simultaneous slowdown in the US, EU, and Chinese economies. “We expect a third of the world economy to be in recession… Even countries that are not in recession would feel like a recession for hundreds of millions of people,” said IMF chief Kristalina Georgieva.
IMF Economic Predictions for 2023
The IMF’s Managing Director Kristalina Georgieva spoke with CBS on the World Economy in a Sunday interview. She revealed her outlook for the US, EU and China:
What will we see in 2023? For most of the world’s economy, this year will be difficult. It will be more difficult than the one we left behind. Why? Because the US, EU, and China – the three largest economies – are all slowing down at the same time.
“The US is more resilient. America can avoid recession. We see that the labor market remains quite strong. However, this is a mixed blessing because if the labor market is very strong, the Fed may need to keep interest rates tighter for longer to reduce inflation,” said the IMF chief.
“The EU was hit hard by the war in Ukraine. Half of the European Union will be in recession next year. China is going to slow down even more this year,” he added.
Georgieva went on to say, “The year ahead will be difficult for China. This translates into global negative trends.”
We expect a third of the world economy to be in recession. Even countries that aren’t in recession might feel like a recession to hundreds of millions of people.
The IMF head noted that the world has changed dramatically, with it being “more prone to shocks” such as the Covid pandemic, the Russia-Ukraine War and the cost-of-living crisis.
“My message [is] don’t believe we are going back to the pre-Covid predictability. More uncertainty, more overlapping crises await us… We have to buckle up and act in that more agile, precautionary way,” Georgieva concluded.
What do you think about the predictions of the International Monetary Fund? Let us know what you think in the comments section.
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