A Tough 2022 Predicts IMF's Kristalina Georgieva

She says we should expect, as indicators are showing, a weak second quarter with a further downgrade of the global growth figures. This not only for 2022 but also for 2023.

A Tough 2022 Predicts IMF's Kristalina Georgieva
Kristalina Ivanova Georgieva-Kinova, Chair and Managing Director of the International Monetary Fund 

Kristalina Ivanova Georgieva-Kinova who is the chair and managing director of the International Monetary Fund since 2019 is predicting a tough 2022 as we enter the second half of the year.

In a blog post on the IMF website, she writes, "It is going to be a tough 2022—and possibly an even tougher 2023, with increased risk of recession."

The warnings from the top IMF official should not be taken lightly. And this is why.

She says when the G20 last met in April, the IMF had just cut its global growth forecast to 3.6 percent for this year and next. Now, it appears this cut was conservative.

She said the IMF did warn that the situation could get worse given the, "potential downside risks. Since then, several of those risks have materialized—and the multiple crises facing the world have intensified."

Inflation

From the war in Ukraine to its economic impact and slowing growth added with the rising cost of living, the situation can only get worse.

We all know that inflation is higher than expected and has broadened beyond food and energy prices.

She says this has prompted major central banks to announce further monetary tightening—which is necessary but will weigh on the recovery.

Continuing pandemic-related disruptions—especially in China—and renewed bottlenecks in global supply chains have hampered economic activity, she adds.

For that matter, she says we should expect, as indicators are showing, a weak second quarter with a further downgrade of the global growth figures. This not only for 2022 but also for 2023.

Thus, we, at Business News, believe that a real tightening of belts and more measures to improve savings are needed in this situation.