January 16: The International Monetary Fund (IMF) has projected global economic growth to remain unchanged in 2023. Meanwhile, the World Bank (WB) has reduced the growth forecast for the same period. In 2023, the world economy is expected to grow by 2.7 percent, said Kristalina Georgieva, managing director of IMF. She said that the increase in oil prices is unchanged, the labor market is still strong, and the growth projection of the fund will be kept unchanged.

She says that this year will be difficult for the world economy as the prices are still at a high level. However, she suggested not to expect one cut after another like last year. At a press conference held at IMF's headquarters in Washington DC, Georgieva said that the growth rate will remain slow in 2023 and the positive part of the economic picture now is a robust labor market.

As long as people are employed, even if the price is high, they will spend and that will support the economic activities, said Georgieva. She also emphasized that the fund does not expect any significant reduction in the world economic growth rate this year. “This is good news, isn't it?” She said.

She expressed the hope that the world's economic growth rate will reach its peak and start rising gradually towards the end of 2023 or 2024. Georgieva has shown great hope about China's economy, which was very disappointing last year. However, from the middle of this year, it is said that it will start contributing to the economic growth rate again, which will only happen if China sticks to its plan of not reversing to the zero Covid-19 policy.

The world's largest economy, the United States, is estimated to land safely the next year. Georgieva says that there are uncertainties such as a major cyber attack, the threat due to Russia's attack on Ukraine escalating, such as the use of nuclear weapons, etc.

It is uncertain what the impact of growing social unrest and tight economic conditions will be in Brazil, Peru and other countries. She said, “Even last year, unexpected things happened twice. Now we are in a shock state. It will not be surprising if such shocks are seen this year as well.”

A few days ago, WB on the other hand said that the world economy would grow by only 1.7 percent this year. This growth will be the weakest in three decades. This is 1.3 percentage points less than WB's estimate earlier. It is said that many central banks of the world are tightening monetary policy to control inflation and the possibility of growth is still uncertain as Russia's attack on Ukraine continues.

WB said that due to high inflation, aggressive interest rate hikes to control inflation, and the spread of the Covid-19 virus in many countries including China, Japan, the world economy will be pushed into recession. WB said that within three years of coming out of the recession caused by the pandemic, the global economic growth rate is very close to falling into a recession again.