Economic crisis may evolve into a global recession in 2023

The head of the International Monetary Fund (IMF) Kristalina Georgieva said that outlook for the global economy had “darkened significantly” since April, and she couldn’t exclude a possible global recession next year.

In the weeks to come the IMF will cut, for the third time this year, its 2022 forecast of growth of the global economy, after slashing its earlier forecast by nearly a full percentage point in April. The Fund is planned to publish an updated forecast for 2022 and 2023 at the end of July, where the global GDP growth of 3.6% is expected (economists are still finalizing new figures). Let us recall that in 2021 the global economy grew by 6.1%.

“The outlook has darkened significantly since our last update in April,” Georgieva told Reuters, citing widespread inflation, major rise in interest rates, slowdown in China’s economic growth and toughen sanctions against Russia amid the military conflict in Ukraine. When asked if she could rule out a global recession, the head of the IMF answered: “The risk has gone up so we cannot rule it out.” “It's going to be a tough '22, but maybe even a tougher 2023,” the expert added.

Source: Reuters