IMF Chief Georgieva: 2023 has the potential to be far worse for Global Economy than 2022

IMF Chief Kristalina Georgieva recently told the press that the organization will cut its forecast for global economic growth in 2022 to 3.6%, the third or fourth time this year that it has done so. She continued by saying that the IMF's top economists were still evaluating the fresh numbers and added that the organization would, in fact, lower its prediction in the coming weeks. 
The International Monetary Fund is expected to release revised forecasts for 2022 and 2023 by the end of the month. After the IMF cut its forecasts by 1% in April, the current situation is understandable.

When asked about the state of things, she said that the worldview has worsened substantially since the last upgrade in April. She cited a more even increase in wages around the world, a larger increase in interest rates, a slowdown in China's economic growth, and intensifying sanctions due to Russia's conflict with Ukraine as evidence. The outlook has worsened significantly, she said.

In her report, Georgieva said she couldn't rule out the potential of a worldwide recession since the threat has increased. She said this in answer to a question about whether or not she could provide evidence of a recession.

Recent economic numbers, Georgieva said, revealed that several foreign economies, including Russia's and China's, had decreased in the second quarter, and she made an effort to stress that the threats were much higher in 2023. For example, she mentioned that both Russia's and China's economies shrank in the second quarter.

She believes that 2022 will be a challenging year, but that 2023 has the potential to be far worse. It's more likely that the economy will experience a dip in 2023.

For the second day in a row, a big part of the United States Treasury yield curve went negative, which means a drop is coming and makes investors more worried about the possibility of a recession.

The Federal Reserve chair, Jerome Powell, said earlier this month that the United States banking system wasn't trying to purposefully precipitate a recession but that it was fully committed to keeping prices under control. This comment was made in response to a query as to whether or not the United States banking system was actively seeking to bring about a recession.

Georgieva warned that a long-term economic downturn would make it harder to predict the state of the world economy. She also stressed the importance of keeping prices from going through the roof in order to get the economy back on track.

She claims that the international situation is more complex now than it was even two years ago. She pointed out that nations like the United States, which exports energy, are in a better position than those that import it.

In order to restore price stability, she said, a slower rate of economic growth may be a "necessary price to pay.”