International Monetary Fund (IMF) President Georgieva (Kristalina Georgieva) said on Thursday (12th) that the global economy will remain severe in 2023, but she predicts that the IMF will not continue to revise down its annual growth forecast like last year, and the economic growth will continue to grow. It is expected to bottom out at the end of the year.
Georgieva said that 2023 will be another severe year for the global economy, and inflation will remain stubborn, but she believes that unless something unexpected happens, the IMF will not continue to lower its growth forecast like last year.
Economic growth will continue to slow in 2023, she said, but the good news is that the labor market is resilient and as long as people are working, even if prices are high, they will continue to spend, which will help the economy.
Georgieva said that the IMF may not significantly downgrade its global economic growth forecast when it updates its “Global Economic Outlook” on the 31st of this month. She is also optimistic that economic growth will turn around by the end of 2023 or early 2024.
The IMF estimated in October last year that global GDP would grow by 2.7% in 2023.
China used to contribute about 35 percent to 40 percent of global economic growth, but last year’s results were disappointing, Georgieva said. The IMF believes that China is expected to contribute to the global economy again this year, and it is estimated that it will start in the middle of the year. The specific situation depends on the Chinese government’s attitude towards the epidemic prevention policy, that is, continuing to promote reopening.
Georgieva also said the U.S. is on track for a soft landing this year, and if it does enter a technical recession, it will be relatively mild.
Still, she warned that the global economy still faces uncertainties, including a major climate event, a cyber attack or an escalation of the war in Ukraine to a nuclear war.
She said: “We are in a more vulnerable world and we have to be open to risks that may exist that we haven’t even thought about, and that’s been the focus of the past few years, the unimaginable has happened twice gone.”