Global growth forecasts for 2023 have darkened further, with an increasing risk of growth falling below 2%, IMF Managing Director Kristalina Georgieva told an economic forum on Thursday.
In publishing its World Economic Forecasts (WEO) report, the International Monetary Fund (IMF) had forecast growth of 2.7% for 2023, noting that there was a 25% chance it would fall below 2%.
“Looking at recent indicators, we are concerned that this probability is increasing, due to the simultaneous slowdown in the US, Europe and China,” Georgieva said during an online intervention on the Reuters Next forum.
The Fund is due to update its 2023 forecast in January, but the economic situation “has darkened recently, based on what we are seeing in both consumer and investor sentiment,” the IMF chief added.
A first since 2009
Global growth of less than 2% would be the first since 2009 (-1.3%), if we exclude the consequences of the pandemic in 2020, the year in which world GDP fell by 3.3%.
However, the global context is not yet positive, recalled Ms Georgieva, in particular due to the impact of the war in Ukraine on the European economy, but also due to the effects of China’s “zero Covid” policy.
“We forecast China’s growth this year at 3.2%, equivalent to world growth. It has never happened in the last 40 years to see China at the same level as world growth. Until now, between 35% and 40% of the World growth depended on Chinese growth, but that is not the case this year, and it will not be the case next,” insisted Kristalina Georgieva.
On Tuesday, the managing director of the Fund had indicated that Chinese growth could be revised downwards due to “anti-covid restrictions and (the) difficulties in the real estate sector, hit by a succession of bankruptcies of developers and difficulties in completing the works ” . The IMF estimated this Wednesday that “a gradual and safe readjustment of the Covid strategy was possible” in China, which would limit its economic impact.
Source: BFM TV
