2023 will be a tough year when it comes to the economy
Even though the new year has only just begun, there are predictions being made concerning the state of the global economy. According to the International Monetary Fund (IMF), 2023 could be a tougher year than the year we just had.
IMF
The International Monetary Fund, or IMF, is an organization founded in 1944, consisting of 190 member countries. This international organization works together to stabilize the world economy. They keep track of events that might pose a risk to the global economy and provide loans to member countries that struggle to keep their economy stable. The head of the IMF is Kristalina Georgieva and according to an article by the BBC, Georgieva said that the year 2023 will be more tough than 2022.
Recession
The reason for this prediction is the war that is still going on in Ukraine, the current inflation and the spread of the COVID-19 virus in China. Georgieva told Face the Nation: “We expect one third of the world economy to be in recession,” That would include countries that are doing fairly well. The head of the IMF said that even though some countries might slip through and escape the recession, millions of people will still experience economic hardship.
China
Especially the events in China are cause for concern. The country has recently lifted their COVID restrictions and reopened the country (and economy) but cases of infection have been on the rise. According to the BBC, Georgieva said that this would lead to a rough start of 2023 for the Chinese economy. “For the next couple of months, it would be tough for China, and the impact on Chinese growth would be negative, the impact on the region will be negative, the impact on global growth will be negative,” she told Face the Nation by CBS.
According to Katrina Ell, a Sydney based economist who shared her evaluations with the BBC, the odds of a recession are high. With Europe most likely to face economic challenges and the United States “teetering on the verge”.
Also read: US implements mandatory COVID-testing for travellers from China