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Third of The Global Economy will Shrink in 2023

Views: 9     Author: Site Editor     Publish Time: 2022-12-20      Origin: Site

As 2022 draws to a close, the global economy appears to be continuing to deteriorate with no signs of improvement.


According to a previous report by China News Agency, Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), said at the 2022 Global Annual Meeting of the International Financial Forum (IFF) on December 2 that the world economy is slowing down. The IMF predicts that the global economic growth rate will be 2.7% in 2023, but there is a 25% probability that the actual growth rate will be lower than 2%. Georgieva said that by 2023, at least one-third of the world's countries are expected to be in recession. In fact, many developed countries have released their recession outlook for 2023...


Third of The Global Economy Will Shrink in 2023


Four major international institutions warn: the global economic outlook is deteriorating

According to the Financial Associated Press, the IMF stated that the global economic slowdown is more severe than expected, inflation is at the highest level in decades, financial conditions in most regions are tightening, the conflict between Russia and Ukraine broke out, and the new crown epidemic continues. had a serious impact on the economic outlook.


World Bank President Malpass was also pessimistic about the global outlook, saying: "I am very concerned that the world is at risk of a global recession."


Malpass warned that years of sluggish growth and widespread asset repricing could be ahead, creating a real long-term crisis for people in the developing world. He stressed that more work needs to be done to free the world from stagflation.


WTO Director-General Iweala pointed out on Friday that global trade is facing real challenges and trade growth is losing momentum. She expects global merchandise trade to grow just 1% next year, a sharp slowdown from 3.5% this year.


OECD Secretary-General Mathias Koeman also expects the global economic outlook to continue to deteriorate.


Last year's global economic growth rate was 6%. If it drops to 3.2% this year and 2.7% in 2023, it will be the weakest growth performance since 2001 (excluding the worst phase of the global financial crisis and the new crown epidemic).


Third of The Global Economy Will Shrink in 2023-2


A number of developed countries released their economic recession outlook in 2023

At the same time, governments, economists, and international rating agencies have also expressed concern about the economic prospects of many developed countries such as the United States, the United Kingdom, Germany, and Japan, all of which are expected to experience an economic recession in 2023.


United States

According to CCTV Finance and Bloomberg data, Wall Street analysts have a negative forecast for the growth rate of the S&P 500 next year, that is, a decline compared with this year. This is the first time in more than 20 years. The American business community is also worried about the economic outlook. According to the latest survey by the Conference Board, as many as 98% of American corporate CEOs expect the United States to fall into an economic recession next year.


U.K.

Credit Suisse said a few days ago that the British economy has entered recession in the third quarter, and it is expected that the country's economy will continue to shrink for most of 2023, with GDP falling by 2.0% from peak to trough. The contraction was driven by a squeeze on real incomes for consumers and businesses, weaker external demand and a tightening of monetary policy by the Bank of England. UK GDP growth is forecast to be -1.3% in 2023, up from 4.3% in 2022, as high inflation and high interest rates are likely to continue to squeeze real incomes for consumers.


Germany

According to CCTV news, the German federal government has lowered its economic forecast for the country in 2022 and 2023, and it is expected that Germany will fall into an economic recession in 2023. The German Ministry of Economy lowered the annual economic growth in 2022 from 2.2% expected in the spring to 1.4%, while the economic forecast for 2023 is more pessimistic. It is expected that the German economy will fall into recession and shrink by 0.4%. The federal government also expects inflation to remain elevated, with consumer prices rising an average 8.0% instead of the 6.1% forecast in the spring.


Italy

According to CCTV news, the international rating agency Fitch predicted in its latest outlook report that due to the impact of rising energy prices, Italy's GDP will experience a negative growth of 0.7% in 2023. In addition, the Italian Federation of Industrialists released a report in October showing that the Italian economy is at risk of recession. The organization's forecast for Italy's economic growth in 2023 was cut to zero from 1.6% in April this year. At the same time, the report also pointed out that if energy prices rise further, or if the supply of natural gas continues to be blocked, the Italian economy may experience a significant recession.


Spain

According to Cloud Finance, the Spanish Ministry of Finance stated in late October that Spain’s GDP is expected to show negative growth in this quarter and the next quarter, and it is expected that Spain’s GDP growth rate in the fourth quarter of 2022 will be negative 0.2% to negative 0.3% %, the country’s economy is also expected to experience negative growth in the first quarter of 2023. The department also warned that in the European Union's forecast data, Spain's economic recession is more serious than the country's financial sector forecast data.


New Zealand

New Zealand faces a recession next year amid a slowing global economy and the Reserve Bank of New Zealand raising interest rates to curb inflation, the government said. Gross domestic product (GDP) will shrink for three consecutive quarters starting in the second quarter, New Zealand's Treasury said in its semi-annual economic and fiscal report released in Wellington on Wednesday. Overall, the economy will shrink by 0.8% in 2023, the report said. The Reserve Bank of New Zealand last month forecast four consecutive quarters of contraction starting in the second quarter and said it may raise the official cash rate to 5.5 percent from the current 4.25 percent to regain control of inflation.


Sweden

"Swedish Daily" reported a few days ago that Swedish Finance Minister Elisabeth Svantesson said that the Swedish economy is heading for a rather severe winter and will enter an economic recession. It is important to maintain a balanced fiscal policy so as not to aggravate inflation. Inflation is high at 5.9%, and unemployment is set to grow. The government expects Sweden's GDP growth rate to be -0.4% next year, and the Swedish Institute of Economic Research expects Sweden's GDP growth rate to be -0.1% next year.


Japan

According to Xinhua News Agency, the latest data showed that Japan's export growth slowed in October. Some analysts say that the slowdown in export growth may push the Japanese economy into recession in 2023, and the continued depreciation of the yen and high inflation are also having a direct negative impact on the Japanese economy. On December 6, Tile Ent, a senior Japanese economist at Capital Economics, a market research firm, said: "The Japanese economy will enter a recession sometime next year. The recession is mainly caused by factors such as a decline in exports."


Canada

According to CCTV news, on November 3 local time, Canadian Deputy Prime Minister and Minister of Finance Chrystia Freeland delivered an autumn economic statement in the House of Representatives. Freeland believes that the global economy is at risk of falling into a recession in the "downside scenario", consumer confidence is deteriorating, and the Canadian economy may enter a "moderate recession" in the first quarter of 2023.

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