Energy, inflation and interest rate hikes will continue to hit the global economy, which is expected to record one of its lowest growth rates in 20 years. WATCH THE VIDEO
“The worst is yet to come,” is how the International Monetary Fund described the year that has just begun in its latest forecasts from last October. A judgment that director Kristalina Georgieva recently reflected on: “This will be a tough year for most of the global economy, tougher than the one we’re leaving behind”.
The International Monetary Fund forecasts that more than a third of the global economy will slip into recession in the coming months, a year that should be the worst year for GDP since 2001 (excluding the 2008 and 2020 crises).
The “non-forecasts” on GDP in 2023
Estimates of global economic growth over the next 12 months vary widely. It starts at the +1.4% expected by the rating agency Fitch to almost double that expected by the International Monetary Fund.
In any case, even the most optimistic forecasts will be lower than the historical average of the last decade (excluding 2020).
Country you go, recession you find
However, the crisis will not hit with the same intensity everywhere in the world. The Eurozone seems destined for a technical recession (ie GDP decline in at least two consecutive quarters) and Italy and Germany are the two most vulnerable countries. The United States, on the other hand, can still avoid a crisis. In any case, most investment banks (including JP Morgan Chase, Morgan Stanley, and Goldman Sachs) and international organizations believe that any U.S. recession would be “light,” if not “mild.”
Italian growth returns to zero
Italy will be one of the countries most vulnerable to the winds of the crisis. After two years – 2021 and 2022 – in which the Italian economy managed to recover to pre-Covid levels ahead of schedule and ahead of other major European countries, 2023 looks set to put us back on a growth path of zero comma.
The graph shows the “slide” of Italy’s 2023 growth forecasts, published by the IMF, OECD, Bank of Italy and the Italian government (more optimistic than the other institutions). At the end of 2021, the expected growth even exceeded 2.5%, only to suddenly fall back when the war broke out in Ukraine. A sign of optimism is the Bank of Italy’s upward revision in its latest December report, which revised its forecast slightly from +0.3 to +0.4%. Not much, just one decimal place, but it’s the first positive revision in the last 12 months.
Inflation lowers purchasing power
The price increase in Italy reached double digits and reached +11.8% in November. In 2023, it should slow down slightly and stop at an annual average of 7.3% (compared to the average of 8.8 in 2022), according to the Bank of Italy.
If the forecasts are confirmed, the loss of purchasing power of Italian workers would be amplified. Compared to 2015, according to Sky TG24 readings on data from Istat and Bankitalia, prices will rise by 22.5%, ten points more than wages.