IMF IMF: 'The worst is yet to come' as 2023 will feel like a recession for many
The International Monetary Fund warned that 2023 will feel like a recession for many as it cut its global growth outlook for the next year, stating"the worst is yet to come."
The IMF pointed out that this is the weakest outlook in the last two decades, with the exception of the global financial crisis and the extreme phases of the COVID-19 pandemic. Most of the slowdown will hit the euro area, reducing growth to 0.5% in 2023 as the energy crisis triggered by the war in Ukraine takes a heavy toll.
"For many emerging markets, the strength of the dollar is a major challenge," the IMF highlighted."The appropriate response in most emerging and developing countries is to calibrate monetary policy to maintain price stability, while letting exchange rates adjust, conserving valuable foreign exchange reserves for when financial conditions really worsen."
In a separate Global Financial Stability report, also published Tuesday, the IMF noted that risks to financial stability have"materially worsened," adding that markets are at risk of a"disorderly repricing."