“The worst is yet to come.” With these words, the International Monetary Fund comments on its forecasts for the coming fiscal year, given the many crises currently keeping the world in suspense. Indeed, the forecast figures in today’s global economic report, released Tuesday, point to a bleak future: the global economy will cool further next year. A third of the global economy is likely to fall into recession by 2023!
Of the IWF cut the forecast for 2023 again at the start of its member states’ consultations in Washington this week. According to this, the world economy would only grow by 2.7 percent, compared to 2.9 percent in July. An increase of 3.2 percent is expected for 2022. Compared to 2021 with a growth of 6.0 percent, these are meager values.
The major economic regions are all weakening. Europe is particularly affected by the war in Ukraine. Gas prices have more than quadrupled since 2021. In the US, 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 worst is yet to come and for many people 2023 will also feel like a recession,” said IMF economist Pierre-Olivier Gourinchas.
Inflation peak reaches fast
Of the IWF expect inflation, which is currently at the highest level in many countries, to peak at the end of 2022. However, it will remain at a significantly higher level for a longer period of time. The focus is currently on the central banks, which have recently tried to bring about more stable price developments with unusually strong interest rate increases. It’s noisy in here IWF the risk of doing both too little and too much. Excessively high rate hikes could choke growth immeasurably, and hesitating too long could not curb inflation.
Source: Krone
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
