IMF: A third of the world will be hit by recession in 2023

A third of the world will be hit by recession in 2023, including half of the European Union, lasting longer in the UK whose recovery will be one of the weakest among g7 nations.

The head of the International Monetary Fund, IMF, Kristalina Georgieva, has issued a dire warning over the economic outlook in 2023 warning that this year is going to be even tougher than 2022.

The US, EU, and Chinese, economies have slowed down, the Ukraine conflict, soaring prices, hiked interest rates and the rise of the COVID, have all contributed to the slowdown in the global economy.

• The International Monetary Fund (IMF) has warned that a third of the global economy will be in recession this year.
  

  IMF issues dire warning

  The International Monetary Fund (IMF) has warned that a third of the global economy will be in recession this year.

The IMF head postulates that a third of the world economy will be hit by recession in 2023.

For most of the world's economy, this is going to be a tough year, tougher than the year we leave behind. Why? Because the three big economies, US, EU, China, are all slowing down simultaneously.

Half of the European Union will be in recession next year. China is going to slow down this year further; next year would be a tough year for China. And that translates into negative trends globally.

Kristalina Georgieva, Managing Director, IMF

In October, the IMF slashed its outlook for global economic growth in 2023. They blamed the gloomy outlook on the ongoing conflict in Ukraine and tougher monetary policies.

• Germany’s Federal Statistical Office says the country is grappling with its highest annual inflation in more than 70 years.
  

  Germany inflation hits highest level in over 70 years

  Germany

According to Georgieva, China will face a very difficult start to the year 2023 since it is likely to grow at, or below, global growth for the first time in 40 years.

China has slowed down dramatically in 2022 because of this tight zero COVID policy. For the first time in 40 years, China's growth in 2022 (sic) is likely to be at, or below, global growth; that has never happened before. And looking into next year, for 3,4,5,6 months, the relaxation of COVID restrictions would mean bushfire COVID cases throughout China.

Kristalina Georgieva, Managing Director, IMF

• The United States approved arms sales to NATO Allies increased dramatically in 2021
  

  US arms industry the sole winner of the war in Ukraine

  Despite conditions in which the Dow Jones Industrial Average has fallen by 10% for the year as a whole, the share prices of US defense contractors have surged.

According to Georgieva, the US economy may avoid a recession but warned that a strong labor market in America may lead the US Federal Reserve to keep interest rates tight so as to combat high inflation, which could have negative economic consequences of its own.

This comes amid similar predictions by other institutions. The UK based Center for Economics and Business Research has projected a global slide into recession next year as a number of economies will contract due to surging borrowing costs introduced to combat inflation.

We expect central bankers to stick to the guns in 2023. Despite the economic costs the cost of bringing inflation down to more comfortable levels is a poor growth outlook for a number of years to come.

 Kay Daniel Neufeld of Cebr

The Cebr report is more pessimistic than the most recent forecast by the International Monetary Fund. Meanwhile, oil prices continue to slide weighed down by China's rising COVID cases and a recession warning from the IMF.

The warning comes amid a worsening economic crisis in developed nations. Recently, Germany's Federal Statistical Office said the country is grappling with the highest annual inflation in more than 70 years.

• Skyrocketing energy prices have cost Europe nearly $1 trillion according to a recently published report which states the current situation is the fallout of the war in Ukraine and is just the beginning of the deepest crisis in decades.

According to official data inflation reached 7.9% in 2022, amid a surge in energy and food prices. The last time annual inflation was near that level was in the year 1951 when it stood at 7.6% as the post war economic boom began.

The UK faces one of the worst recessions among the world's leading industrialized nations this year.

We are not the government; we haven't been in power for 12 years.

Every aspect of society has been impacted by government policy, 10 years of austerity, cuts the economy, slowing growth, a badly handled Brexit, whatever your view on Brexit was, has all led to where we are today.

But the fact that we've got so many people out on strike, and so many people suffering, only the government can change it; or a change of government can change it.

UK Striking worker

The fallout from spiraling inflation triggered by the COVIS-19 pandemic, compounded by the Ukraine conflict, will persist for longer in the UK than in other g7 nations and all signs indicate the country's recovery will be one of the weakest.

• Britain is the only member of the group of seven economies yet to recover fully from the COVID slump wth some forced to eat pet food
  

  Briton's turn to pet food amid the cost of living and energy crises

  Can the British government, headed by the multimillionaire Prime Minister, Rishi Sunak and his austerity budget even come close to fixing the UK economic crisis, which has resulted in many eating pet food?

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