IMF Managing Director Kristalina Georgieva says 2023 will be another “difficult year” for the global economy.
The International Monetary Fund (IMF) is not expected to postpone the 2.7 percent growth of 2023, the head of the global lender said, noting that the concern about the increase in the price of oil did not prevail and the labor market remained firm.
IMF Managing Director Kristalina Georgieva said 2023 would be another “difficult year” for the global economy and inflation remained stubborn, but she did not expect another year of consecutive declines similar to what was seen last year, barring unexpected developments.
“Growth continues to slow in 2023,” he told reporters at IMF headquarters in Washington, DC. “The most positive picture is the strength of the labor market. As long as people are employed, even if prices are high, people will spend… and that has helped work. “
He added that the IMF does not expect any significant downgrades. That’s good news.
Georgieva said the IMF expects global growth to “bottom out” and “turn around towards the end of ’23 to ’24”.
Georgieva also said there is great hope that China – which used to contribute 35 percent to 40 percent of global growth, but had “disappointing” results last year – will again contribute to global growth, possibly from mid-2023. But that depends on Beijing not changing course and sticking to its plans to roll back zero-COVID policies, he said.
He said the United States, the world’s largest economy, is likely to see a mild recession and will only suffer if it enters a recession.
But Georgieva said that great uncertainty remains, including a significant weather event, a large-scale cyberattack or the risk of an escalation of Russia’s war in Ukraine, for example by using nuclear weapons.
“Now we are in a world that likes to be more shocked and we have to be open minded that there may be an opportunity for risk that we don’t even think about,” he said. “That’s all in the past years. The unexpected happened twice. “
He cited concerns about growing social unrest in Brazil, Peru and other countries, and said the effects of tightening financial conditions are still unclear.
But inflation remained “stubborn” and central banks should continue to press for price stability, he added.