Brace yourselves for impact! Third of world in recession this year, IMF head warns

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Third of world in recession this year, IMF head warns
Third of world in recession this year, IMF head warns. Via BBC

For those who rely on the MSM for the warning… This is from BBC. Brace yourselves for impact. When it’s the MSM reporting things like this, it has been going on for months.

Head of IMF Kristalina Georgieva said 2023 WILL BE “TOUGHER” THAN LAST YEAR as the US, EU and China see their economies slow down. It comes as the war in Ukraine, rising prices, higher interest rates and the spread of Covid in China weigh on the global economy.

Here the warning:

A third of the global economy will be in recession this year, the head of the International Monetary Fund (IMF) has warned.

Kristalina Georgieva said 2023 will be “tougher” than last year as the US, EU and China see their economies slow.

It comes as the war in Ukraine, rising prices, higher interest rates and the spread of Covid in China weigh on the global economy.

In October the IMF cut its global economic growth outlook for 2023.

“We expect one third of the world economy to be in recession,” Ms Georgieva said on the CBS news programme Face the Nation.

“Even countries that are not in recession, it would feel like recession for hundreds of millions of people,” she added.

Katrina Ell, an economist at Moody’s Analytics in Sydney, gave the BBC her assessment of the world economy.

“While our baseline avoids a global recession over the next year, odds of one are uncomfortably high. Europe, however, will not escape recession and the US is teetering on the verge,” she said.

The IMF cut its outlook for global economic growth in 2023 in October, due to the war in Ukraine as well as higher interest rates as central banks around the world attempt to rein in rising prices.

Since then China has scrapped its zero-Covid policy and started to reopen its economy, even as coronavirus infections have spread rapidly in the country.

Ms Georgieva warned that China, the world’s second largest economy, would face a difficult start to 2023.

“For the next couple of months, it would be tough for China, and the impact on Chinese growth would be negative, the impact on the region will be negative, the impact on global growth will be negative,” she said.

The IMF is an international organisation with 190 member countries. They work together to try to stabilise the global economy. One of its key roles is to act as an early economic warning system.

Ms Georgieva’s comments will be alarming for people around the world, not least in Asia which endured a difficult year in 2022.

Inflation has been steadily rising across the region, largely because of the war in Ukraine, while higher interest rates have also hit households and business.

Figures released over the weekend pointed to weakness in the Chinese economy at the end of 2022.

The official purchasing managers’ index (PMI) for December showed that China’s factory activity shrank for the third month in a row and at the fastest rate in almost three years as coronavirus infections spread in the country’s factories.

In the same month home prices in 100 cities fell for the sixth month in a row, according to a survey by one of the country’s largest independent property research firms, China Index Academy.

On Saturday, in his first public comments since the change in policy, President Xi Jinping called for more effort and unity as China enters what he called a “new phase”.

The downturn in the US also means there is less demand for the products that are made in China and other Asian countries including Thailand and Vietnam.

Higher interest rates also make borrowing more expensive – so for both these reasons companies may choose not to invest in expanding their businesses.

The lack of growth can trigger investors to pull money out of an economy and so countries, especially poorer ones, have less cash to pay for crucial imports like food and energy.

In these kinds of slowdowns a currency can lose value against those of more prosperous economies, compounding the issue.

The impact of higher interest rates on loans affects economies at the government level too – especially emerging markets, which may struggle to repay their debts.

For decades the Asia-Pacific region has depended on China as a major trading partner and for economic support in times of crisis.

Now Asian economies are facing the lasting economic effects of how China has handled the pandemic.

The manufacture of products such as Tesla electric cars and Apple iPhones may get back on track as Beijing ends zero-Covid.

But renewed demand for commodities like oil and iron ore is likely to further increase prices just as inflation appeared to have peaked.

“China’s relaxed domestic Covid restrictions are not a silver bullet. The transition will be bumpy and a source of volatility at least through the March quarter,” Ms Ell said.

Bill Blaine, strategist and head of alternative assets at Shard Capital, described the IMF’s warning as “a good wake up and smell the coffee moment”.

“Even though labour markets around the world are fairly strong, the kind of jobs being created are not necessarily high paying and we’re going to have a recession, we are not going to see interest rates fall as rapidly as the markets think,” he told BBC Radio 4’s Today programme.

“That’s going to create a whole series of consequences that will keep markets on tenterhooks for at least the first half of 2023.” [BBC]

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11 Comments

  1. 50cal,
    I took a whole package of raw liver out to my chickens. Put it in a bowl. Stepped out to fill a bucket of water. Came back and liver was gone. You can feed chickens anything.

    • Yeah, chickens and roosters will eat anything. Even scorpions and baby lizards. My ducks chase and eat mice too. One night I was watching them hunt under the lights, and couldn’t figure out what the ducks were chasing down. Got the binoculars out, and started laughing my ass off. One night this baby owl I rescued and cut loose, he flew upside-down doing a barrel roll and snatched a big red bat from under the lights. The bat was hunting bugs, but ended up dinner. It was pretty neato the way he did it too.

  2. Absolutely Dead On, 50cal. I got the Wake-Up call in the mid 80s. Started stocking up in 89. Bet doing it ever since. Knew it was going to get rough, just not when. But we are definitely at the front door now. And my brain runs over time on things I could have done much better. That would probably be true no matter what. Cities will be death traps. Just no way to survive with all those people. Impossible to be eating without all your starving zombie neighbors knowing. Senses become hyper tuned. You open a jar of peanut butter inside your house, and they will smell it a 100 yards away:-)

    • Even off grid, we have inbred heathen welfare bums. They drink and smoke meth until their welfare check runs out. Miserable people. Among the worst trash I have ever been around. Sheriff are worthless here too. Underfunded and underpaid. 1.5 hour repsonse time for a felony-in-progress. However, I can shoot tresspassers here.
      🤣

      • .50cal I have just moved house due to the very issue you stated “inbred heathen welthfare bums that smoke meth till check runs outs” but when theirs run out, they just go to all the surrounding building sites and steal all the copper plus other materials. They even stole from our house, we were living behind them. With well too many kids than they can afford, they still keep popping them out and getting worse each year. They are the same age as me (in my 30’s) but they are already looking like they are early 50’s.

      • Yeah Alex, they suck, and do similar crap out here. We can shoot tresspassers here. So, believe me, I am setting up on ’em.

  3. Most people do not even have $500 in their savings. I have been preparing since homobama was trying to infect America with ebola, ok. So, I take this crap seriously. No matter how hard one prepares there will always be minor holes in their strategy.

    The main objective is to identify holes in your preparedness and fill those gaps. Even before I moved offgrid, I had rented a storage container and was stockpiling supplies five years before I moved. Once you get offgrid, it is harder to obtain materials and supplies. Planning goes a long way. If you live in a big city, then you will not be happy when the shtf. You will be dead meat.

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