IMF CEO Prevents Recession, But Also ‘Sharp Improvement’ in 2023

The Director General of the International Monetary Fund (IMF) has been wary of a global economic recovery in 2023 and has ruled out a recession, though she doesn’t think there is a “drastic improvement” in the current 2.7% growth forecast.

On the last day of this year’s Davos Forum, Kristalina Georgieva, along with European Central Bank (ECB) President Christine Lagarde, Japanese Central Bank Governor Haruhiko Kuroda, and French Finance Minister Bruno Le Maire, took stock of the policies needed to spur global growth.

Georgieva admitted that her impression is “a little better than a few months ago” but not “totally optimistic” despite the fact that “inflation has improved and is moving in the right direction” and that China’s growth could once again exceed the world average by this year.

In addition, the labor market is in great shape and consumers are “consuming and supporting growth,” he says.

Not wanting to position himself as “neither too optimistic nor too pessimistic,” he warned of risks such as uncertainty about the evolution of inflation, which is on a downward trend that can be reversed, and the disruption of supply chains, one of the consequences of the war in Ukraine. which has had a major impact on trade, the engine of growth in recent decades.

Lagarde, who confirmed at the Davos forum this week that inflation “remains very high,” also acknowledged “some improvement” and acknowledged that the situation is “not as bad as feared” even though fiscal 2022 was “extremely bad.” “. rare”, with unusual growth rates.

China woke up again, intends to grow by 5.5%, and it became clear that “its policy of” covid zero “will bring many victims, but will allow the country to return to the path of growth,” he stressed.

And, of course, they believe that this will again increase energy prices and, therefore, affect inflation, as soon as the Asian country begins to increase its demand.

Speaking about a possible increase in interest rates, Lagarde said that “holding the course is the mantra of the ECB’s monetary policy.”

Japan’s Kuroda, who has defended his country’s attempts to get back on track after decades of deflation, opted for moderate optimism and predicted that the country’s economy “could grow by 1-2% over the next two years.”

Le Maire preferred to focus on one of the main themes of this year’s Davos forum – the fight against climate change and decarbonization, and noted that “this is not about China, the US or Europe, but about the climate.”

In his opinion, everything you do “everything you put in must go in this direction”, otherwise the bill will be “infinitely more expensive”.

The position of the IMF, according to Georgieva, is the same, which is why the organization encourages investments of public and private capital “in this sector in particular and in developing countries in general,” since “green” agreements may “not be effective in developing countries.” .

Le Maire also underlined the urgency of “ending the war in Ukraine, which is not a regional conflict but a global one, and which directly affects the prices of raw materials and energy, in addition to being a threat to common European values.”