What will happen to the global economy in 2023? Expert opinion

(ORDO NEWS) — The prospects for the New Year, of course, remain unpredictable, but still, some trends in the general movement of states are worth knowing!

For much of the global economy, 2023 will be a difficult year as the main engines of global growth (the United States, Europe and China) experience a weakening of activity, Kristalina Georgieva, head of the International Monetary Fund, warned.

The new year will be “harder than the year we left behind,” Georgieva notes. “Why? Because the three major economies – the US, the EU and China – are slowing down at the same time.

We expect a third of the global economy to be in recession. Even in countries that are not in recession, it will be felt by hundreds of millions of people as a recession, ”the expert added.

What will happen to the global economy in 2023 Expert opinion 2
There are still several key players on the geopolitical map of the Earth

Economy in 2023

Two months earlier, the IMF lowered its forecast for global economic growth in 2023, reflecting the ongoing conflict in eastern Europe.

The IMF also reflects inflationary pressures and high interest rates set by central banks such as the US Federal Reserve, which are trying to ease price pressures.

Georgieva said China – the world’s second largest economy in its own right – is likely to grow at or below global (total) growth levels for the first time in 40 years as the number of Covid-19 cases soared following the lifting of the super-strict zero-infection policy.

What’s more, a “wildfire” of expected Covid infections in the coming months is likely to further hit China’s economy and slow down both regional and global growth, said Georgieva, who traveled to China on IMF business in late December.

“Over the next few months, it will be difficult for China, the impact on global growth will be negative,” the specialist explains.

What will happen to the global economy in 2023 Expert opinion 3
The US and China still lead the global market

Where is good in 2023

Meanwhile, according to Georgieva, the US economy stands apart and can avoid the direct contraction that is likely to affect a third of the world’s economies.

“The US is the most resilient. We see that the labor market remains quite strong. It’s… a mixed blessing, because if the labor market is very strong, the Fed [Federal Reserve] may have to keep interest rates lower for longer to bring down inflation,” Georgieva said .

The first week of the new year brings a plethora of key employment data, including Friday’s monthly nonfarm payrolls report, which is expected to show the US economy added 200,000 more jobs in December.

This will keep the unemployment rate at 3.7%, one of the lowest levels on the planet since the 1960s.

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