Kristalina Georgieva, the Managing Director of the International Monetary Fund, recently weighed in on the global economy, suggesting that 2023 could mark a turning point. The IMF’s press service conveyed her assessment to readers, highlighting a cautious outlook for the world economy. According to Georgieva, global growth remains weak but may be at a threshold where a stabilization or modest acceleration becomes possible. After expanding by 3.4 percent in the previous year, growth is projected to slow to 2.9 percent in 2023, with a gradual improvement to 3.1 percent anticipated in 2024. This forecast implies a delicate balance between demand and supply pressures, as policymakers navigate energy costs, supply bottlenecks, and evolving trade dynamics. The message emphasizes that timely policy action will influence the outcome for many economies. [IMF press service]
Georgieva underscored that, in 2023, governments and central banks should prioritize the fight against inflation. While consumer price growth globally is expected to ease to around 6.6 percent this year, inflation remains materially above levels seen before the pandemic in many countries. The IMF chief noted that the path to price stability will require a combination of prudent fiscal discipline, credible monetary policy, and targeted support for households and businesses most affected by price pressures. The overall aim is to prevent a wage-price spiral while sustaining a necessary recovery in activity. [IMF press service]
She also cautioned that geopolitical tensions, including conflicts such as the Ukraine situation, could slow the rebound in investment and trade. Escalation in such conflicts tends to disrupt energy markets, disrupt supply chains, and erode business confidence, all of which can dampen growth prospects worldwide. The assessment calls for resilience measures, including diversified energy sourcing and strategic policy tools to shield vulnerable economies without delaying essential reforms. [IMF press service]
In a related update from the International Labour Organization, Gilbert Houngbo, the ILO director-general, spoke about the broader labor market implications. He estimated that more than 200 million workers would face significant financial hardship in 2023. Even for those who work full-time, the current wage levels may fall short of a livable standard, with daily earnings at risk of dipping below critical thresholds. Houngbo stressed the need for social protection programs and targeted wage support to cushion workers against volatility. The figures reflect ongoing challenges in many regions as they recover from the pandemic and adjust to shifting labor demand. [ILO press materials]