“the worst is yet to comefor many people it’ll feel like 2023 recession”. The storm that has plunged the global economy into troubled waters continues to grow, with elements ranging from the war in Ukraine to the fastest-rising inflation in decades. Economic slowdown in China and its lasting effect Pandemic or blows climate change, pessimism who spent months penetrating their analysis and messages International Monetary Fund (IMF) definitely settled. And what dominates meWorld Economic Prospects ReportPresented this Tuesday in Washington.
The analysis currently maintains its global growth forecasts for this year: 3.2% however Reduces calculations to 2.7% for 2023, two-tenths less than expected at the revision of data in July. Additionally, the agency sees a 25% probability of falling below 2%, something that has only happened five times since 1970.
These are the weakest global growth figures since 2001, excluding the 2008 crisis and the worst moment of the pandemic. And flies with them ghost of recession This does not appear to be the case in the IMF’s immediate forecasts, but in the risk scenario, 43% of economies are experiencing a “technical recession” (two-quarter contraction) at some point between this year and next year. with these quarterly data.
The energy crisis in Europe is worse
The war waged by Russia continues to take multiple blows. The lowest-income households, and above all in the lowest-income countries, are the ones most affected by rapidly rising food prices. But at the same time, as the IMF recalls, “especially in Europenot a temporary shock”.
With more than 80% of Russian supply cut off, Gas prices more than quadrupled in Europe and famine expectations are rising. And Pierre Oliver Gourinchas, chief economist of the IMF, wrote in the preface to the report: 2022 winter will be tough But for Europe The winter of 2023 will likely be worse”.
Inflation
The most urgent and alarming threat to the global economy, identified by the body led by Kristalina Georgieva, is in any case, stubborn inflationwhich reduces income and undermines macroeconomic stability. accelerated this year Fastest pace since 1982 and it also confirms that it is more permanent than expected. Now expected to reach its destination peak this year with 8.8%and let it go down 6.5% in 2023but also to continue rose longer than they expected: won’t go down according to recent calculations 2024 4.1%.
The agency insists Central banks will “stand firm” with a monetary policy that is firmly focused on controlling inflation, but also assumes the influence of these policies, particularly the United States Federal Reserve, which has increased interest rates by three percentage points since the beginning of the year, pointing to this. will continue to do so.
The IMF believes that “the shocks of 2022 will reopen wounds that have only partially healed post-pandemic” and believes that the strong appreciation of the dollar increases the potential for a worsening of the doubt crisis, especially in emerging and emerging markets. will weigh heavily on global growth and could accelerate a global recession”.
Still, the IMF warns against making the mistake of underestimating inflation’s stubborn persistence, and urges central banks to resist “increasingly loud” calls to ease their measures. “If they succumb to pressure, they will need more aggressive and painful actions later on,” the report says. While he assumes that going too far risks pushing the global economy into an “unnecessarily harsh recession,” he also warns against falling short. “It will make inflation more entrenched, erode the credibility of central banks and make it harder to lower prices,” he said.
fiscal policy
The IMF also urges governments to take measures that protect the most vulnerable, but warns against the risk of fiscal policies intersecting with attempts to control inflation.recommending overly broad or untargeted stimulus measures like general tax breaks. “If some measures become unavoidable, it is important to place policy within a credible medium-term fiscal framework,” the report says.
The document also highlights: increased risk of calculation errors in monetary, fiscal or fiscal policy in particular, where the world economy has historically remained fragile and financial markets show signs of stress”. And in the gray panorama he describes and envisions, he warns that “as the economy enters turbulent waters, there may be financial turmoil.”
climate change
The third part of the report is devoted to the following topics: energy transition policiesessential for tackling the climate crisis. In the face of voices suggesting that this transition should wait until the current moment of inflation and the energy crisis is over, the IMF’s key message is: “If appropriate measures are implemented immediately and gradually over the next eight years, costs will continue to rise.” It is also underlined that these costs are nothing compared to the ‘costs’. the numerous long-term costs of inactivity”.