The main engines of global growth – the United States, Europe and China – are experiencing waning activity, which will affect much of the global economy.
The coming year 2023 will be more difficult for the global economy than the year left. This is what the director of the International Monetary Fund, Kristalina Georgieva, reported on Sunday, January 1, Reuters.
For most of the global economy, 2023 will be a difficult year, Georgieva said, as the main engines of global growth – the US, Europe and China – experience waning activity.
“Why? Because the three big economies – the US, the EU and China – have slowed down at the same time,” she stressed.
The IMF director recalled that in October the Fund lowered its forecast for global economic growth in 2023, due to the impact of the Russian war on Ukraine, as well as inflationary pressures and high interest rates adopted of central banks in many countries. Since then, however, China has lifted its “zero infection” COVID-19 policy and begun a turbulent national economic recovery, although consumers remain cautious as the number of coronavirus cases continues to rise. Therefore, Chinese leader Xi Jinping recently called for greater efforts and unity as China enters a “new phase.”
“For the first time in 40 years, China’s growth in 2022 is likely to be at or below global growth,” Georgieva said.
At the same time, he noted that annual growth in China may accelerate to 4.4% in 2023, while global activity will further slow. However, the IMF director’s comments suggest that at the end of January, when the IMF usually releases updated forecasts during the World Economic Forum in Davos, there could be another reduction in forecasts for both China and the global economy as a whole.
At the same time, Georgieva said, the US economy is isolated and can avoid an outright recession that is likely to hit a third of the world’s economies.
“The US is the most resilient and can avoid a recession. We see that the labor market here remains relatively strong,” the head of the IMF states.
But that fact in itself is dangerous, because it could hinder the US Federal Reserve’s (Fed) progress plan to return inflation to the 2% target. In fact, the US labor market is at the center of attention of Fed officials who aim to reduce the demand for labor to help reduce price pressures.
Earlier, Georgieva reported that global consumer growth is approaching a peak.
news Correspondent.net on Telegram. Subscribe to our channel Athletistic
Source: korrespondent
I am David Wyatt, a professional writer and journalist for Buna Times. I specialize in the world section of news coverage, where I bring to light stories and issues that affect us globally. As a graduate of Journalism, I have always had the passion to spread knowledge through writing.