Global growth seen below 3% in 2023: IMF
The lowest medium-term growth prediction since 1990, according to the International Monetary Fund (IMF), predicts that in 2023, the rate of global economic growth would fall below 3%. In her remarks on Thursday, IMF Managing Director Kristalina Georgieva noted that despite significant and well-coordinated monetary and fiscal policy responses to the COVID-19 pandemic and Russia’s invasion of Ukraine in recent years, growth prospects remain dim due to persistently high inflation and rising geopolitical tensions. Georgieva also noted that while 90% of advanced economies will experience a dip in their growth rate this year, India and China would still account for 50% of global growth in 2023. According to her, per-capita income growth in low-income nations would remain lower than that of emerging economies.
Georgieva urged central banks to continue their fight against inflation as long as financial pressures were kept to a minimum in order to address concerns to financial stability. She cautioned against “hidden” risks at banks and nonbanks, despite the fact that policymakers have reacted quickly to previous sector stress.
NewsOTG gathered that Georgieva also advocated for significant step changes to improve the chances for development and productivity, including investing an estimated $1 trillion per year in renewable energy and actions to prevent the fragmentation of the global economy, which may reduce global GDP by as much as 7%. She also issued a warning over the technological decoupling, which might cause certain nations to lose up to 12% of their GDP. This information raises worries for the world economy because it shows that the COVID-19 epidemic and other crises may take longer to recover from than originally thought. The IMF’s low growth prediction shows that people and businesses must be ready for a difficult economic environment.
Businesses and individuals can manage their money and investments proactively to get through these unpredictable times. For instance, individuals can look for professional guidance on investing ideas that can still provide profits despite difficult economic circumstances. To raise money for their company, they can also investigate alternative financing sources like peer-to-peer lending and crowdfunding. In conclusion, the IMF’s low growth projection for the world economy serves as a wake-up call for people and businesses to get ready for a difficult economic climate. They may navigate these unpredictable times and come out stronger on the other side by taking proactive measures to manage their finances and investments.