The Impending Recession
The year 2022 is a tough one; however, 2023 shall be tougher. Kristalina Ivanova Georgieva-Kinova, the Managing Director of the International Monetary Fund (IMF), recently vociferated such a prediction. She has discussed the problems in her personal blog, saying that the world economy shall face the heat in the coming financial year. According to the Bulgarian economist, the COVID-19 Pandemic and the Russia-Ukraine War have rocked the Global Economy. Georgieva is of the opinion that it would be difficult for the Global Economy to bounce back even in 2023. Hence, there shall be more than just a possibility of recession.
The IMF chief has mentioned in her blog that the primary challenge of the global lender is to tackle inflation. She has also urged all the countries to try to curb inflation, stating that inflation continues to act as a catalyst especially when Pandemic-ravaged economies are about to collapse in the face of a war.
As per the latest forecast, the rate of inflation could touch 5.7% in Developed Nations by the end of 2022, and 8.7% in Developing Nations. Georgieva has stated that all the countries should be prepared to face a tough time in 2023, adding that the overall growth of the World Economy is likely to slow down. She has opined that inflation could have a negative impact on economic growth.
Georgieva has also mentioned in her blog that the stagnation of the Chinese economy is a great concern, as China’s economic slowdown could slow the growth of the Global Economy. It could directly affect the G-20 countries. The IMF boss has advised all the countries to stress on the revenue collection and expenditure. This is the only option to keep inflation under control, believes Georgieva. At the same time, she has warned the debt-ridden countries, saying that nations should ensure free flow of funds for public sectors, instead of falling into the debt-trap. In this context, she has discussed the current political situation in Sri Lanka.
Georgieva has expressed concern over the issue of food security. If the Global Economy falls into recession, or the rate of inflation increases, then food crises shall emerge in various Developing Nations. The G-20 nations should be prepared to deal with such a situation. Countries, like India, have imposed export bans on various food items in order to meet local demand, which is also one of the causes of great concern, stressed the IMF chief.
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