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The Director of the International Monetary Fund, Kristalina Georgieva, expects that the fund will not reduce its forecast for global economic growth of 2.7% in 2023, noting that fears regarding high oil prices have not materialized, and that labor markets are still strong..
Georgieva said that 2023 will be another “difficult year” for the global economy, and that inflation is still rampant, but she does not expect another year of successive cuts in growth forecasts like the one witnessed last year, unless unexpected developments occur..
“Growth continues to slow in 2023, and the most positive part of the picture is the resilience of labor markets … as long as people work, even if prices are high, they will spend … and that helps performance,” she told reporters at the fund’s headquarters in Washington.“.
She added that the IMF does not expect any significant cuts in growth forecasts, saying: “This is the good news“.
And she stated that the Fund expects the slowdown in global growth to reach its “extreme” before “turning to an increase by the end of 2023 and in 2024.”“.
She added that there is a lot of hope that China, which previously contributed regarding 35 to 40% of global growth, but achieved “disappointing” results last year, will contribute once more to global growth, probably from mid-2023..
Georgieva explained that this depends on Beijing not changing course and adhering to its plans to change the zero Covid policy it was pursuing..
She said the United States, the world’s largest economy, would likely suffer only a moderate recession, if it did indeed enter a technical recession..
But Georgieva stressed that there is still a lot of uncertainty, including a major cyber attack or the risk of an escalation of the Russian war in Ukraine, through the use of nuclear weapons for example..
She added, “We are now in a world that is more vulnerable to shocks and we have to be open, because there may be a shift in risks that we do not even think regarding. This is what we have witnessed in the past years. What is unimaginable happened twice.”“.
She noted concerns regarding growing social unrest in Brazil, Peru and other countries, and that the impact of monetary tightening remains unclear.
The IMF manager stressed that inflation remains “stubborn” and central banks should continue to press for price stability.
Source: Arabic
