Some experts have expressed optimism for the global economic space going forward, adding that “this could be the extreme deep that we can go”.
The International Monetary Fund (IMF) last Tuesday (11 October) cut its global growth forecast for 2023 amid colliding pressures from the war in Ukraine, high energy and food prices, inflation and sharply higher interest rates, warning that conditions could worsen significantly next year.
The Fund said its latest World Economic Outlook forecasts show that a third of the world economy will likely contract by next year, marking a sobering start to the first in-person IMF and World Bank annual meetings in three years.
“The three largest economies, the United States, China and the euro area will continue to stall,” IMF chief economist Pierre-Olivier Gourinchas said in a statement. “In short, the worst is yet to come, and for many people, 2023 will feel like a recession.”
The IMF said global GDP growth next year will slow to 2.7%, compared to a 2.9% forecast in July, as higher interest rates slow the U.S. economy, Europe struggles with spiking gas prices and China contends with continued COVID-19 lockdowns and a weakening property sector.
The Fund is keeping its 2022 growth forecast at 3.2%, reflecting stronger-than-expected output in Europe but a weaker performance in the United States, after torrid 6.0% global growth in 2021.
But speaking with Kwaku Nhyira-Addo on the Asaase Breakfast Show on Tuesday (18 October), a financial economist at the University of Ghana Business School, Prof Lord Mensah, said “It is a time that the global space has bubbled enough and we are hoping that going deeper I can say this could be the extreme deep that we can go. It all depends on the dynamics and how things revert as a result of the Ukraine war and the uplift from COVID…
“the happenings have to do with certain levels of investments that need to be done across the globe; that would depend on the sacrifices that the financially-muscled countries are prepared to do…”
Prof Mensah added, “but what I can tell you is that I think we’ve gone deeper enough and there is a way out going forward may be looking at the latter part of next year, we should see the uplift of the global economic space.”