IMF: in 2023 the global economy will slow down even more and the risk of recession will increase

Next year World economy it will slow more than expected, and the International Monetary Fund (IMF) is already warning that several countries will be very close to recession.

global economy according to the fund, it will grow by an average of only 2.7%, which is two-tenths less than its previous forecast and less than the 3.2% calculated for this 2022.

The IMF points out that risks that have already slowed global economic development will persist and could worsen it, with at least a third of global economies expected to enter a technical recession next year.

What is a recession? A recession implies that a country’s economy will have at least two consecutive quarters of decline in its gross domestic product (GDP), meaning its production will fall for six consecutive months.

The agency even calculated that there is a 25 percent chance that the situation will worsen and overall growth does not reach even 2% next year, which has not been the case since 2001, with the exception of the first year of the pandemic.

The situation will worsen in the face of high global inflation, ahead of which the IMF is asking central banks to continue to tighten monetary policy, even if this implies a slowdown in economic growth.

“In short, the worst is yet to come and for many, 2023 will feel like a recession,” said Pierre Olivier Gourinsha, IMF research director.

What will contribute to this lesser progress?

As they pointed out, the war between Russia and Ukraine continues to “powerfully destabilize” the global economy and has led Europe into a “severe energy crisis.”

Other factors for a minor economic progress In 2023, an inflationary spiral is expected that will affect the whole world, as well as a slowdown in the Chinese economy.

By 2023, the IMF predicts that China will grow by 4.4%, two tenths less than expected a few months ago. This reduction comes as its zero-COVID policy and its permanent closures have taken their toll, in addition to the weakness of its real estate sector.

The Fund claims that the brake on China is one of the factors most strongly affecting the global economic course, especially because of the serious problems it creates in supply chains and will continue to “strongly influence global trade and activities”.

For the United States, growth of 1% is projected for 2023, with a larger impact of the crisis expected in the major eurozone economies.

In the euro area, the IMF predicts a much bigger drag on countries most dependent on the euro. gas in Russian. This is why the eurozone will grow by just 0.5% in 2023, seven tenths less than the Fund had previously estimated.

(According to the EFE agency).