2023 is a difficult year
Slow economy in US, EU, China
China faces a difficult start to 2023
The sheet of 2023 is finally opened after going through the tortuous 2022.
However, this year is expected to be more difficult for the global economy, according to the head of the International Monetary Fund (IMF), Kristalina Georgiva.
This is because, 3 giants of global growth; The United States, Europe and China are experiencing weaker activity.
This situation comes at a time when the Russia-Ukraine war, a surge in inflation, higher interest rates and Covid-19 in China are weighing on the global economy.
The IMF cut its global growth forecast for 2023 in October, saying more than a third of the world's economy will contract.
In fact, there is a 25% chance the economy will grow less than 2% in 2023 which he defines as a global recession.
Examining expectations for the US, EU and China, Georgieva paints a mixed picture of their ability to withstand recession.
He said, the US may be able to avoid recession due to the labor market remaining strong.
However, that is not a good sign because it will continue to give room to the Federal Reserve (Fed) to raise interest rates in an effort to lower inflation.
In addition, the IMF predicts that half of the EU will experience recession this year, while China will face a difficult start to 2023.
The hasty reopening of the economy in China has created chaos following a surge in Covid-19 cases and fueled global concern over the possibility of a new spread.
The latest warning from the IMF gives the impression that the world economy will go through a more challenging year in 2023 than last year.
