For much of the global economy, 2023 is going to be a tough year as the main engines of global growth - the United States, Europe and China - all experience weakening activity, the head of the International Monetary Fund (IMF) warned. She said the new year is going to be “tougher than the year we leave behind,” IMF Managing Director Kristalina Georgieva said on the CBS Sunday morning news program “Face the Nation.”
“For the first time in 40 years, China’s growth in 2022 is likely to be at or below global growth,” Georgieva said. Moreover, a “bushfire” of expected Covid infections there in the months ahead are likely to further hit its economy this year and drag on both regional and global growth, said Georgieva.
Meanwhile, Georgieva said, the U.S. economy is standing apart and may avoid the outright contraction that is likely to afflict as much as a third of the world’s economies. The “U.S. is most resilient,” she said, and it “may avoid recession. We see the labor market remaining quite strong. This is... a mixed blessing because if the labor market is very strong, the Fed may have to keep interest rates tighter for longer to bring inflation down.”
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