IMF Warns of Tough Year Ahead for World Economy Citing Slowdown in US, EU, China

The International Monetary Fund (IMF) has warned that 2023 volition beryllium a tougher twelvemonth for astir of the satellite system due to the fact that the U.S., EU, and Chinese economies are each slowing down simultaneously. “We expect one-third of the satellite system to beryllium successful recession … Even countries that are not successful recession, it would consciousness similar recession for hundreds of millions of people,” said IMF main Kristalina Georgieva.

IMF’s 2023 Economic Predictions

International Monetary Fund (IMF) Managing Director Kristalina Georgieva shared the IMF’s predictions connected the U.S., the EU, China, and the satellite system successful an interrogation with CBS, aired Sunday. She detailed:

This is what we spot successful 2023. For astir of the satellite economy, this is going to beryllium a pugnacious year, tougher than the twelvemonth we permission behind. Why? Because the 3 large economies, U.S., EU, China, are each slowing down simultaneously.

“The U.S. is astir resilient. The U.S. whitethorn debar recession. We spot the labour marketplace remaining rather strong. This is, however, a mixed blessing due to the fact that if the labour marketplace is precise strong, the Fed whitethorn person to support involvement rates tighter for longer to bring ostentation down,” the IMF main continued.

“The EU was precise severely deed by the warfare successful Ukraine. Half of the European Union volition beryllium successful recession adjacent year. China is going to dilatory down this twelvemonth further,” she added.

Moreover, the IMF brag said:

Next twelvemonth volition beryllium a pugnacious twelvemonth for China. And that translates into antagonistic trends globally.

“When we look astatine the emerging markets successful processing economies, there, the representation is adjacent direr. Why? Because connected apical of everything else, they get deed by precocious involvement rates and by the appreciation of the dollar. For those economies that person precocious level of that, this is simply a devastation,” she cautioned.

Regarding China specifically, Georgieva described: “In the abbreviated term, atrocious news. China has slowed down dramatically successful 2022 due to the fact that of this choky zero Covid policy. For the archetypal clip successful 40 years, China’s maturation successful 2022 is apt to beryllium astatine oregon beneath planetary growth. That has ne'er happened before.”

Emphasizing that she hopes the U.S. system “is not going to gaffe into recession contempt each these risks,” the IMF managing manager shared:

We expect 1 3rd of the satellite system to beryllium successful recession … Even countries that are not successful recession, it would consciousness similar recession for hundreds of millions of people.

Georgieva added that “the satellite has changed dramatically,” noting that “it is simply a much shock-prone world.” She explained that these shocks see Covid, the Russia-Ukraine war, and the outgo of surviving crisis.

“My connection [is] don’t deliberation that we are going to spell backmost to pre-Covid predictability. More uncertainty, much overlap of crises hold for america … We person to buckle up and enactment successful that much agile, precautionary manner,” she concluded.

What bash you deliberation astir the predictions by the International Monetary Fund? Let america cognize successful the comments conception below.

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