The International Monetary Fund (IMF) paints a bleak picture in its world economic report published yesterday, Tuesday, in Washington. According to this, a third of the global economy is likely to slip into recession by 2023. The economy is likely to cool down further.
The IMF cited the sharp rise in prices since the beginning of the Ukraine war as the main reason, which is significantly reducing the purchasing power of consumers. “The worst is yet to come, and for many people 2023 will also feel like a recession,” said IMF economist Pierre-Olivier Gourinchas. The global economy is facing huge challenges as inflation is more stubborn than expected and China is also losing traction.
Next year, the world economy is only likely to grow by 2.7 percent, in July 2.9 percent was still expected. For this year, the economists continue to expect an increase of 3.2 percent. Compared to 2021 with growth of 6.0 percent, these are meager values.
Inflation remains high
As reported, all important economic regions are currently weakening. Europe is particularly affected by war and energy prices. In the USA, consumption is no longer driving the economy as usual. And in China, corona restrictions and tensions in the real estate market are having a negative impact.
The IMF expects inflation to peak in late 2022. But it will remain at a significantly higher level for a longer period of time. Global inflation is likely to rise by 8.8 percent this year and by 6.5 percent in 2023. 4.1 percent is expected for 2024. The IMF estimates that emerging and developing countries will be hit harder than industrialized countries.
Source: Nachrichten
