One third of the global economy will likely be hit by a recession this year. This was stated by top woman Kristalina Georgieva from the International Monetary Fund (IMF) in an interview with the American channel CBS. According to her, 2023 will likely be “heavier than the year we leave behind.”
ABN Amro chief economist Sandra Phlippen shares Georgieva’s sadness. “She says the bigger continents – Europe and North America – but also China will struggle,” she says. And this for three different reasons. Next year there will be a shortage of energy due to the war. Furthermore, the corona crisis, especially in China, is not over yet. And the biggest problems in the US are about raising interest rates, because interest rates have to go up because of high inflation, but they come at a time when the economy is already cooling down. And then it actually reinforces the decline.’
Zerocovid China
A lot has happened since the IMF’s last big forecast. For example, China has abandoned its zero-covid policy and embarked on a chaotic reopening of its economy. The number of corona infections is now rising rapidly again and this will likely have an impact on growth in the near future. Georgieva has yet to provide concrete figures to CBS. The IMF is expected to release an update to its global growth forecast later this month.
Quite gloomy
When it presented a study, the fund was already gloomy in December about the performance of the Dutch economy, which IMF experts say is unlikely to show growth this year. The energy price cap that the government has introduced cannot prevent life from becoming more expensive again across the board, experts have predicted. And while the Netherlands has enough energy reserves to keep the country going, it could simply be that energy shortages elsewhere in the EU are exacerbating the energy crisis in the Netherlands.
Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
