“2023 will be less bad than previously feared”

From the point of view of the International Monetary Fund (IMF), the global economic outlook has not changed dramatically compared to the October forecast. But the situation is “less bad than we expected a few weeks ago,” said IMF boss Kristalina Georgieva at a discussion forum at the World Economic Forum in Davos.

“But less bad doesn’t mean good.” Challenges such as high inflation and the war in Ukraine remained. It is important to ensure that the economic assessments do not switch from “too pessimistic to too optimistic,” said Georgieva: “Stay in the middle of realism.” She had previously signaled that the forecast for global economic growth of 2.7 percent this year would probably not be revised further downwards.

ECB boss wants to stay the course

There will now probably be a bottom formation. The trend reversal could then succeed at the turn of the year 2023/24. The IMF will present its updated forecast for the global economy and the individual countries at the end of January.

ECB President Christine Lagarde has reiterated the central bank’s determination not to let up in the fight against inflation. “Staying the course is my mantra for monetary policy purposes, no question about it,” Lagarde said.

The ECB President also commented on the opening of the Chinese economy after Corona. “There will be restraints, there will be more inflationary pressures from additional demand for commodities and especially energy,” Lagarde said. China clearly missed its target in 2022 with economic growth of three percent, but wants to return to its old strength this year after the end of the strict corona restrictions.

Lagarde also addressed the fiscal support given in Europe to fight inflation. These should be more targeted. And they must be designed in such a way that monetary policy is not pushed to do more.