According to IMF Managing Director Kristalina Georgieva, major economies including the United States, Europe, and China are all in a slowdown phase, making 2023 considerably more challenging than 2022.

IMF Managing Director Kristalina Georgieva predicted a rough year for the global economy in an appearance on the CBS television program Face the Nation on January 1.

The main economies of the United States, Europe, and China are all in a slowdown phase, leading Kristalina Georgieva to forecast that 2023 would be "tougher" than 2022.

According to the IMF's leader, 2023 will be "more difficult than even 2022 we leave behind" for the global economy.

The IMF revised its forecast for global economic growth in 2023 downward in October 2022 in response to the continued conflict between Russia and Ukraine, inflationary pressures, and high interest rates caused by central banks such as the US Federal Reserve.

The zero-COVID policy will be abandoned in China on January 8, 2023, and the country will reopen its economy. On December 31, 2022, President Xi Jinping made his first public statement since the policy shift, in which he urged more effort and unity as China entered a new chapter.

Georgieva predicts that by 2022, China's growth rate will be around the same as or lower than the global growth rate.

A more significant influence on China's economy and, by extension, regional and global development, from the COVID-19 issue is expected in 2023.

She predicted that China will have difficulties over the next months, saying that this would have a detrimental effect on development in Beijing, the region, and the world.

Ms. Georgieva predicted that half of the European Union (EU) will be in recession by the end of next year, while the United States might be able to escape recession.

She said that the robust US job market was responsible for the country's ability to recover from the recession.

The US gained 263,000 nonfarm payroll jobs in November 2022, which was better than projected, and the unemployment rate is currently at 3.7%.

Morgan Stanley forecasts that by December 2022, the unemployment rate will remain unchanged and the United States will have added 185,000 jobs.

The third-quarter gross domestic product in the United States was revised up to 3.2% at the end of December 2022, from 2.9% in November.

However, more than two-thirds of the 23 financial organizations polled by the Wall Street Journal that interact directly with the Fed anticipate a recession in the United States this year.

Those aforementioned financial institutions and investment banks are what is known as "primary dealers," and they include the likes of Barclays, Bank of America, TD Securities, UBS Group, etc. Some concerning trends are emerging in the US economy, including the spending of Americans' personal savings, a declining real estate market, and stricter lending criteria from banks.

PNB Paribas blames the Federal Reserve's monetary policies as the "culprit" for the economic downturn. Since March of last year, the Federal Reserve has repeatedly increased interest rates in an attempt to "rein" the economy and combat inflation. The Fed has expressed concern that inflation in the United States, despite recent declines, remains too high.

The Federal Reserve Board increased the policy interest rate by a total of seven percentage points in 2022, from zero to four point two five percent. Officials from the Federal Reserve said in December that they planned to keep raising interest rates until they reached 5.5–5.5% in 2023.

Most analysts polled by the Wall Street Journal believe that the US unemployment rate would rise from 3.7% in November to above 5% as a result of increasing interest rates. In spite of the historically low level of unemployment, this rise will cause millions of Americans to lose their jobs.

Michael Gapen, chief economist at Bank of America, also spoke on CBS and warned that a recession in the United States is likely but "may not be as deep or as long." As the US Federal Reserve continues to battle inflation, he warned that 2023 might still be a challenging economic year.

IMF Managing Director Georgieva has described the future of developing economies as "bad" due to rising debt and a strong currency. In 2023, the IMF projects that one-third of the world's GDP will shrink.

As many nations are impacted by the crisis in Ukraine, increasing oil and food costs, rising inflation, and rising interest rates, the IMF decreased its prediction for global economic growth in 2023 in October 2022. strong. The International Monetary Fund projects a 2.7% expansion of the global economy in 2023, down from a 2.9% projection published in July 2022.

Whether or not the global economy enters a recession, 2016 looks to be a trying year. Despite recent improvements, "the challenging backdrop for the global economy remains the same," said Guillaume Menuet, director of investment strategy and Europe economics at Citi Private Bank.