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China’s lagging growth a key threat this year, IMF managing director Kristalina Georgieva said, while the US is ‘most resilient.’

For much of the global economy, 2023 is going to be a tough year as the main engines of global growth – the US, Europe and China – all experience weakening activity, the head of the International Monetary Fund has warned.

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 on Sunday.

“Why? Because the three big economies – the US, EU and China – are all slowing down simultaneously,” she said.

“We expect one-third of the world economy to be in recession. Even countries that are not in recession, it would feel like recession for hundreds of millions of people,” she added.

In October, the IMF cut its outlook for global economic growth in 2023, reflecting the continuing drag from the war in Ukraine as well as inflation pressures and the high interest rates engineered by central banks like the US Federal Reserve aimed at bringing those price pressures to heel.

Georgieva said that China, the world’s second-largest economy, is likely to grow at or below global growth for the first time in 40 years as Covid-19 cases surge following the dismantling of its ultra-strict zero-Covid policy.

“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 and drag on both regional and global growth, said Georgieva, who traveled to China on IMF business late last month.

“For the next couple of months, it would be tough for China, and the impact on Chinese growth would be negative, the impact on the region will be negative, the impact on global growth will be negative,” she said.

Meanwhile, Georgieva said, the US 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 “US is most resilient,” she said, and it “may avoid recession. We see the labour market remaining quite strong.”

“This is … a mixed blessing because if the labour market is very strong, the Fed may have to keep interest rates tighter for longer to bring inflation down,” Georgieva said.

The US job market will be a central focus for Federal Reserve officials who would like to see demand for labour slacken to help undercut price pressures. The first week of the new year brings a raft of key data on the employment front, including Friday’s monthly nonfarm payrolls report, which is expected to show the US economy minted another 200,000 jobs in December and the jobless rate remained at 3.7% – near the lowest since the 1960s.


https://www.theguardian.com/business/2023/jan/02/third-of-world-economy-to-hit-recession-in-2023-imf-head-warns

“bushfire” of expected Covid infections

Recession is fine, as long as there is no inflation, recession means we are recovering. Think of it as if you are sick and got a fever, but now you are taking medicine which makes you sweat a lot more. Normally in a healthy person that much sweat is not nice, you would consider that is a bad thing, but in this case a sick person would know it's there to drop their fever by sweating.

This is the same, it is a distasteful thing to have recession, we would prefer not to have it, but if fixes all the inflation issues and goes away in a year then it's good. Remember that period between 2008 crisis and 2011? We went from trouble to nice slowly, it could be that slow again.

With the internet making communications and data more accessible and abundant with technology like blockchain based open ledgers.

Recession is fine, as long as there is no inflation, recession means we are recovering. Think of it as if you are sick and got a fever, but now you are taking medicine which makes you sweat a lot more. Normally in a healthy person that much sweat is not nice, you would consider that is a bad thing, but in this case a sick person would know it's there to drop their fever by sweating.

This is the same, it is a distasteful thing to have recession, we would prefer not to have it, but if fixes all the inflation issues and goes away in a year then it's good. Remember that period between 2008 crisis and 2011? We went from trouble to nice slowly, it could be that slow again.

initially this recession was only limited to speculation,, but it seems that the issue of this recession has become a reality, especially the statement from the IMF, which is increasingly making people panic and withdrawing their assets from the stock market, and this will create a domino effect and make the recession itself come faster

Reccession news in my cuntry is all over the place. Sounds danger actually since we not fully recovered yet finding job is very hard and the wage seem not inrese very much. I hope this year is final year and we come back stronger

Could we witness a decoupling of BRICS (Brazil, Russia, India, China, South Africa) economies? Where some select BRICS nations continue to do well economically, while others trend in the opposite direction?

Reading between the lines, it seems that many nations of the world are taking steps to insulate their native economies from asset and financial contagion. As well as protect themselves against other negative trends associated with declines of the world's largest consumer (USA) and export (china) markets. Although I haven't seen it officially announced, it seems that gold is being bought up in record volumes by major nations of the world who plan to use it as a stablecoin to protect trade against inflation.

Is it fair to say modern day economies have more tools at their disposal to insulate and protect their economy from recession, in contrast to those of previous eras? While fossil fuels and global trade have made modern economies more flexible with larger margins for error? With the internet making communications and data more accessible and abundant with technology like blockchain based open ledgers.

All of which might mean future recessions won't be as bad as they would have had they occurred a century or two in the past.

Recession will still hurt but I certainly believe the internet will help. People in countries like America that have a strong labour market are already looking for more jobs. This will help. It is easier to have side hustles with the help of the internet these days. So people can have 2-4 jobs that won't be as stressful as it used to because it can be a remote job. Even if it's not a remote job, it's easier to find jobs online.

When the big economies suffer, economies in Africa suffer the most. This is because they are so reliant on the big economies. The import almost everything from them, so every negative that affects those big economies also affects them and that's a problem.

China is just coming out of its lockdown attempts, the opposite can happen is a story today I have also seen a warning about.   Despite the best attempts of many western governments to restrict the circulation of excess money printed in prior years, there has been little quantitative tightening actually done just these rate rises which is something else.  The longer term picture still contains excessive currency, if China is back to its full use and production it will raise many commodity markets and in turn we are less likely to see a lull in demand within markets.


I agree thats likely but what % of those cases are serious life threatening is going to be quite low, though it might be callous to say perhaps as any deaths are serious it should not be enough vs a working population to be restrictive to the economy or economic productivity.  Whereas a lockdown situation done in a blanket way for years now has been excessive in its effects.

Remote work can also take a lot of time and effort. 

A big plus of working remotely is that you don't have to commute to and from the office every day.  This saves a lot of time.  Also, you won't have to follow a dress code by spending money on expensive suits and ties. 

However, work is work, you need to spend your energy and attention on it.  At the same time, the more people looking for work on the Internet, the higher the competition. 

And this means that employers will reduce wages and put forward increased requirements for the qualifications of workers.

Isn't inflation cooling down and prices of all commodities going down,almost all countries now,well at least in Europe where I am have written down Russia war and are not that much impacted because of that anymore,price of basic commodities like wheat which is an important part coming from Ukraine and Russia has gone down to pre war levels I am reading and also watching on TV news,the panorama is optimistic and if we get a recession I am sure it will be a short term only.

In the long term I see the 2023 year as one for most of us to recover,we almost have completely left behind that pandemic which in all honesty where I live has increased the surface of the cemeteries in a really horrendous way and I am really glad we have left it back as it is not deadly anymore,let's hope also the economies recover,inflation cools even more and everything goes back to normality.