IMF chief expects 2023 growth to be steady at 2.7%

• 2023 would be another “difficult year” for the world economy: IMF MD Kristalina Georgieva
• Worry about an increase in oil prices had not materialized, she said.
• There is a lot of hope that China will start contributing more to global growth by 2023.

The president of the international lender said on Thursday that the IMF is not anticipated to revise its projection for 2.7% growth in 2023, saying that worries about an increase in oil prices had not materialized and that labor markets were still robust.

IMF Managing Director Kristalina Georgieva predicted that 2023 would be another “difficult year” for the world economy and that inflation would continue to be obstinate, but, barring unforeseen circumstances, she did not anticipate another year of sequential downgrades like those experienced in 2018.

“Growth continues to slow down in 2023,” she told reporters at the IMF’s headquarters in Washington. “The more positive piece of the picture is in the resilience of labor markets. As long as people are employed, even if prices are high, people spend … and that has helped the performance.”

The IMF does not anticipate any significant downgrades, she continued. The good news is that.

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According to Georgieva, the IMF anticipated that the global growth downturn will “bottom out” and “turn around towards the end of ’23 and into ’24.”

There is a lot of hope, according to Georgieva, that China, which used to contribute between 35% and 40% of global growth but had “disappointing” results in 2018, will start doing so again by the middle of 2023. However, she added, that was contingent upon Beijing maintaining its intended course and commitment to reversing its zero-COVID policy.

Despite being the largest economy in the world, she predicted that if a technical recession did occur, it would be moderate and the United States would likely experience a soft landing.

But according to Georgieva, there is still a lot of room for uncertainty, including the possibility of a large hack, a significant climate event, or an escalation of Russia’s conflict in Ukraine, maybe involving the use of nuclear weapons.

“We are now in a more shockprone world and we have to be open-minded that there could be risk turn that we are not even thinking about,” she said. “That’s the whole point of the last years. The unthinkable has happened twice.”

She expressed worries about the spread of civil unrest in Brazil, Peru, and other nations, noting that the effects of tighter financial conditions were still unknown.

However, inflation remained “stubborn,” and she went on to say that central banks should keep pushing for price stability.

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