"
In short, the worst is yet to come and many people will feel like they are in a recession in 2023.
"
In one shocking sentence, the IMF's latest world economic report expresses the concern of the organization which watches over the world economy.
In the six months since the report published in April, the global economic outlook has "
deteriorated significantly and the slowdown in the economy has intensified
", indicates the document published on Tuesday, October 11.
Inflationary pressures are “
stronger than expected
”, details the International Monetary Fund, noting that they have triggered a rapid tightening of monetary policies accompanied by a violent rise in rates, “
parallel to a strong appreciation of the American dollar
”.
This will affect the economy by weighing on demand.
And will eventually gradually reduce the price increase.
But global inflation will remain high longer than expected and will drop to 4.1% in 2024, the Fund worries.
Repeated confinements in China
In addition, the measures taken by China, with endless confinements as part of the zero Covid policy, are leading to a slowdown in the second world economic power "
worse than expected
".
Added to this are the heavy economic consequences of the war in Ukraine.
This “
has led to a serious energy crisis in Europe which sharply increases the cost of living and hampers economic activity.
The price of gas in Europe has multiplied more than four times since 2021. And this is not a temporary shock
”, underlines Pierre-Olivier Gourinchas, economic adviser to the Fund.
Who recalls that “
the conflict has also pushed up food prices on world markets
”.
In this context, if the level of growth in 2022 remains unchanged compared to July estimates, the IMF is revising its forecasts for next year downwards by 0.2%.
Global GDP is only expected to grow by 2.7% in 2023. And the likelihood of its growth falling below 2% is far from negligible.
Very slight growth in France
Crucially, about a third of the global economy will see two consecutive quarters of declining GDP, technically akin to a recession.
For 2023 as a whole, the three largest economies, the United States, European Union and China, will continue to stagnate.
In detail, the IMF sees Germany in recession, as well as Italy and Russia.
He is more optimistic for the United Kingdom, which is not the case with other observers such as the financial rating agency Fitch, which predicts a recession across the Channel.
For France, the IMF expects growth of 0.7% in 2023, below the 1% retained by Bercy for its draft budget but in line with the range of the Banque de France which extends from a decline of 0.5% to an increase of 0.8%.
As always, less developed countries will suffer more.
"
For many emerging markets, the strong dollar is causing serious problems, tightening financial conditions and increasing the cost of imported goods
."
And capital is fleeing fragile countries, underlines the IMF report.
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