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Arab Finance: The International Monetary Fund (IMF) expects the global economic growth to narrow down to 2.7%, or even lower, in 2023, Managing Director of the IMF Kristalina Georgieva told CBS News’ Face the Nation in an interview on December 30th.
This marks a decline from the reported global growth rates of 6% in 2021 and 3.2% in 2022, Georgieva explained.
Georgieva also stated that the IMF projects that one-third of the global economy would face recession.
Moreover, she added that 2023 would represent a tough period for the global economy, with the big three economies; the US, European Union (EU), and China, weakening.
However, the US could avoid recession this year for being the most resilient economy among others as a result of its strong labor market, she noted.
Meanwhile, half of the EU countries are likely to face recession for being strongly affected by the war in Ukraine, Georgieva elaborated, adding that the Chinese economy is projected to slow down further.
The world has been depending on China's supply chain for a long time; however, the world’s second largest economy has faced a deceleration in 2022 amid Covid-19 policies, she said.
“We risk then inflation to be more persistent. Our message is to central banks, you have to see credible decline in inflation and only then you can think about re-calibrating rate policy,” Georgieva remarked.
