FX.co ★ Georgieva predicts global recession in 2023

IMF Managing Director Kristalina Georgieva predicts that the global recession is highly probable in 2023 amid a rapid deterioration in the world economy. "It is going to be a tough 2022 - and possibly an even tougher 2023," she stressed. To justify these words, the IMF intends to lower its global growth forecast for 2022 in the near future. This is not the first downward revision. Notably, analysts at the IMF projected growth at 4.4% in January 2022. However, they estimated it at 3.6% in April. In 2021, the global economy grew by 6.1%. The IMF managing director noted that the publication of the next forecast for 2022 was scheduled at the end of July.

Georgieva listed the reasons for a potential global decline in economic growth. According to her, it is caused by the worldwide spread of inflation, more significant increases in interest rates, an economic slowdown in China and Russia, escalation of geopolitical tensions and imposing sanctions against Russia amid the hostilities in Ukraine.

Even though the US economy will slow down in 2023-2024, it will avoid recession. The IMF expects real GDP growth to decrease to 1.7% and 0.8% in 2023-2024 from 2.9% forecasted for 2022. However, experts estimate that the figures will rise to 1.7% and 2.1% respectively in 2025 and 2026.