January 28, 2023

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Head of the International Monetary Fund: – The time for downgrades is over

The head of the International Monetary Fund, Kristalina Georgieva, believes that the economic downturn that we are witnessing in the world today will end soon.

– Georgieva says that the time for our institution to offer global discounts is over CNBC At the World Economic Forum conference in Davos, Switzerland.

On New Year’s Day, the head of the International Monetary Fund came out and said that “2023 will be worse for the global economy than 2022.” She believes that half of the European Union and a third of the global economy will end up in recession next year.

Why? Because the three largest economies – the United States, the European Union and China – are all slowing at the same time.

Now, however, the tube has taken on a different – this time much more positive – sound.

good news

The head of the International Monetary Fund believes that growth will continue to decline for a while longer, but then it will turn around.

– I don’t see any cuts now, but growth in 2023 will slow down. We estimate that we will decline by half a percentage point from 2022. The good news is that we believe growth will bottom out this year and that 2024 will be a year where we finally see the global economy turned upside down, says Georgieva.

Since October 2021, the International Monetary Fund has cut its growth forecast three times.

In terms of interest rate cuts around the world by central banks, Georgieva believes we’re not there yet. Inflation is declining, but it is still relatively high.

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Central banks have been careful not to let their foot off the brakes too soon, says the head of the International Monetary Fund.

Last week, inflation in the United States fell to its lowest level since October 2021 and inflation in the eurozone fell for the second consecutive month in December.

reopening boom?

China is one of the most exciting and decisive regions in the world for the year 2023.

The reopening of society means that the coronavirus is spreading like never before, providing an uncertain future for the economy. Investors love to reopen the case and have sent the Hang Seng Index up 50 percent since November alone.

However, Georgieva is more measured.

Chinese growth will not go back to the time when China accounted for 40 percent of global growth. This will not happen.

If China continues its policy of reopening, its GDP will grow by 4.4% in 2023, according to the International Monetary Fund.

– Not 7 percent, not 6 percent, but much higher than average growth, says Georgieva.

The data comes after the International Monetary Fund published a New report Which says that the fragmentation of the world – that is, we are becoming less global – can cost the economy 7 per cent of GDP.