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shrinking investment, and disruptions caused by Russia's invasion of Ukraine. Any new adverse events could push the world’s economy into recession. This would mark the first time in more than 80 years that two global recessions occurred within the same decade. Growth in advanced economies will slow from 2.5% in 2022 to 0.5% in 2023. And in emerging markets and developing countries, excluding China, growth will slow from 3.8% in 2022 to 2.7% in 2023.
The night is darkest before the dawn: the IMF predicts economic recovery soon. Despite the global economy’s disappointing forecasts for 2023, it will still rebound from its lowest level and begin to grow moderately, said Kristalina Georgieva, managing director of the IMF. Speaking at the World Economic Forum, she recalled that during the Covid-19 crisis in 2021, global growth reached 6.1%. However, at the beginning of 2022, the pandemic unfolded with new force, and Russia’s war against Ukraine exacerbated its effects. These factors slowed the world’s economy sharply, and 2022 ended with 3.2% growth. In 2023, according to Georgiyeva, economic growth is expected to slow to 2.7%, which will be the lowest expected growth rate. At the same time, three global risks for the world economy still remain this year: the continuation of the Russian war against Ukraine, the crisis in the cost of living and rising inflation, and the interest rate increase on loans to a level that has not been seen for decades.
The EuroChambres predicts difficult times for the global economy. The international business community expects a challenging year in 2023, according to the association’s website. In the European Parliament's global economic survey based on the responses from trade and business organizations, which account for about 70% of global economic output, geopolitical tensions and instability are identified as the main challenges facing the global economy this year. Participants from the US and the UK believe that rising inflation caused by the sharp increase in food and energy prices is one of the main problems. Energy security is of particular concern in the European Union. The EuroChambres, the Association of European Chambers of Commerce and Industry, is one of the largest organizations representing over 20mn businesses in Europe through 45 member countries and a European network of 1,700 regional and local chambers.
Fitch Ratings forecasts the growth of Ukraine's economy in 2023. The American rating agency Fitch forecasts Ukraine's GDP will grow by 2% in 2023, as the war prevents the return of large numbers of refugees or large-scale investment, and power outages create an additional deterrent. Inflation is forecast to ease to 21% in 2023 from 26.6% in 2022, as the loss of manufacturing capacity, power shortages, and gradual elimination of supply chain disruptions offset weak domestic demand. At the same time, Fitch believes that the budget deficit will decrease to 15.2% of GDP in 2023 from 20.1% in 2022. Fitch also forecasts a rise in total public debt to 84% of GDP by the end of 2023. The agency expects that the goal of attracting $38B in external budget financing in 2023 will be fully achieved. And international reserves at the end of 2023 will be 3.8 months of current foreign receipts compared to 4.0 at the end of 2022.
Davos expects a global recession in 2023. Two-thirds of leading private and public sector economists surveyed by the World Economic Forum (WEF) expect a global recession in 2023. The current high inflation, low growth rates, high indebtedness, and a high degree of fragmentation reduce the incentives for investment needed to restore growth and improve the living standards of the most vulnerable, noted WEF Director Saadia Zahidi. The WEF study found large regional differences in inflation expectations: in China, only 5% expect high inflation in 2023, compared to 57% in Europe, where the impact of last year's rise in energy prices spread throughout the economy. Most economists also predict further tightening of monetary policy in Europe and the US, 59%
23 UKRAINE Country Report February 2023 www.intellinews.com