General

The shocking IMF messages.. Georgieva draws a bleak scenario for 2023

Updated Friday 1/13/2023 09:35 PM Abu Dhabi time The Managing Director of the International Monetary Fund, Kristalina Georgieva, expressed her concern about the state of the economy, and expected that the year 2023 would witness global social tension. 2023 is a “difficult year” She says 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 those witnessed last year, unless unexpected developments occur. Georgieva expected that the fund would not reduce its forecast for global economic growth of 2.7% in 2023, noting that concerns about high oil prices had not materialized, and that labor markets were still strong. Georgieva’s expectations, which she told reporters at the Fund’s headquarters in Washington, included that the global growth slowdown would reach its “extreme” before “turning upward by the end of 2023 and in 2024.” Britain declares war on the “food fork”.. Inspecting restaurants to control the “enemy of the climate.” Georgieva said, “We are only on January 12 and we have from now on (models) in Brazil, Peru, Bolivia, Colombia and the United Kingdom, all for various reasons but with social tensions very clear”. And if higher interest rates will eventually affect labor markets, which is a logical consequence of the deceleration target, that could lead to additional tensions, she said. And she added that the situation will not improve soon because of “inflation, which is still solid,” and in confronting it, “the work of central banks has not ended yet,” stressing that “the crisis is most likely not over yet.” Georgieva said that the economic slowdown in 2023 is supposed to be greater than what the fund expected in its last publications in October 2022, but that the national labor markets “proved resistance,” considering this a “positive point.” What did Kristalina Georgieva say to Egypt after the IMF loan?.. Bold messages She added that this was mainly due to “governments moving quickly to provide financial support to the population in the face of high food and energy prices. But the available space is shrinking.” And Georgieva believed that “as long as people have jobs, even if prices are high, they consume, which helped the economy in the third quarter, especially in the states and in Europe, but we realize that the effect of tightening fiscal policies has not yet occurred.” Sovereign debt At the same time, the impact of raising interest rates on debtor countries will be severe, as indicated by Georgieva, whose foundation has been warning for months of the danger of turning about 60% of emerging and developing countries into countries suffering from sovereign debt crises. “For highly indebted countries whose issues are denominated in dollars, the effects (monetary policies) will be significant. When added to this is a devaluation of the currency in the countries concerned, this leads to great hardships for the population,” Georgieva said. And I took the opportunity to remind you of the need to quickly restructure the debts of these countries, a topic “on which we are supposed to hold a meeting in February at the highest level, with the main creditors China, India and Saudi Arabia, as well as the private sector.” Nevertheless, the IMF still considers that “a global recession can be avoided” even if a number of countries experience a decline in GDP, at least “if there is no additional shock”, according to Georgieva. This is especially in the event that China does not change its current policy towards the epidemic, while an economic recovery in the country, starting in the middle of the year, will be “the main engine of global growth for 2023.” And she stressed that “if they continue on their path, China will once again become a positive contributor to global growth, even if it does not reach the rates recorded so far.” Will the American economy hold up? On the other hand, the director of the International Monetary Fund considered that the ability of the American economy to resist makes it possible to avoid a decline at the global level. “What we’re seeing in the United States is remarkable,” she said, noting low unemployment and continued consumption. “We’re also seeing a shift in spending from goods to services,” which is supporting the activity, she said. She added that this “makes it possible to imagine the possibility that the United States will escape a recession. And in the event that they suffer a technical recession, it should remain mild.”

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button