The Global Economy to Suffer Worse Blow Than Thought in October

The International Monetary Fund (IMF), which lowered its global growth forecast for 2023 from 2.9% to 2.7% in October, said that this figure could be reduced again in the future.

Fighting in Ukraine, interest rates increased by regulators in advanced economies and the impact of the COVID-19 pandemic could trigger a slowdown in global GDP growth in 2023.

According to the analytical report on the IMF website, “as the chart illustrates, readings for a growing share of G20 countries have fallen from expansionary territory earlier this year to levels that signal contraction. That is true for both advanced and emerging market economies, underscoring the slowdown’s global nature.”

The fund’s specialists note that countries should continue to prioritize containing inflation and, probably, fiscal and monetary tightening.

On November 4, IMF Managing Director Kristalina Georgieva said that global GDP will shrink by 1.5% annually due to the global trade division. Mrs. Georgieva estimated the economic losses of Asian countries to be equal to 3% of GDP due to the decisive importance of trade in the structure of their economies.

Deterioration in customer payment behaviour

More than half of German companies engaged in chemical, construction and logistics branches expect a worsening in their business customers’ payment behaviour in 2023. This is one of the results of the annual study of the Atradius international credit insurance company.

According to the study, the key issue is that if companies have to pay suppliers before they receive payments from their customers, their financial situation is at serious risk.

Due to uncertainty across all sectors, steps have been taken to ensure timely cash flows. In the chemical industry, this included shortening payment terms, deferring payments to suppliers, and, as in the transport industry, offering discounts for early payments.