The IMF’s leader has predicted that the global economic downturn would hit Thailand and the rest of Southeast Asia hard this year.
Kristalina Georgieva predicts that one-third of the world’s economies will be in recession this year. This would include Thailand and Vietnam.
With the United States, European Union, and China all experiencing economic slowdowns in 2023, the 69-year-old Bulgarian economist predicts that next year will be “tougher” than the previous one.
Russia and Ukraine’s crisis, increasing costs, rising interest rates, and the spread of Covid-19 in China all weigh on the global economy, leading to this forecast.
According to our forecasts, as much as a third of the global economy may be experiencing a downturn. It would seem like a recession for hundreds of millions of people, even in nations that aren’t technically in recession.
Moody’s Analytics analyst Katrina Ell in Sydney, Australia, agrees with Georgieva’s gloomy forecast.
While we don’t expect a worldwide recession in the next year based on our baseline scenario, the likelihood of one is still high. But Europe will not avoid recession, and the United States is on the brink.
According to Georgieva, this year will start out rough for China.
It will be rough for China over the next several months, which might hurt the country’s development, the region’s growth, and global growth.
The International Monetary Fund (IMF) serves as a financial “wake-up call” for its 190 member nations.
Although Thailand has emerged from its post-Covid slumber, Georgieva maintains that the Land of Smiles is not yet prepared to swim in the pool.
The war between Russia and Ukraine is a significant contributor to the soaring inflation rates across Southeast Asia. In addition, companies and families have felt the effects of rising borrowing rates.
In addition to that… This week’s data showed that China’s economy slowed down towards the end of last year.
The official purchasing managers’ index showed that manufacturing activity in China fell for the third month in December, and at the sharpest pace in nearly three years, as coronavirus outbreaks ravaged industries throughout the mainland.
Home prices in 100 Chinese cities have fallen for the sixth month running, according to a poll by China Index Academy, one of the country’s foremost independent property research organizations.
Due to the slump in the American economy, fewer people are buying goods created in Southeast Asian nations like Thailand and Vietnam.
The United States often purchases machinery, rubber, and agricultural items from Thailand.
As a result of the increased cost of borrowing money, some firms may be unable to grow if interest rates remain high.
Poorer nations may have less money to pay for essential imports like food and energy if investors withdraw money from the economy due to the lack of development.
The decline in the value of currencies during slowdowns only makes matters worse.
Government economies, particularly those in developing countries, may struggle to meet their debt obligations if interest rates continue to rise.
Historically, China has been a key commercial partner for the Asia-Pacific area, and the region has relied on China during economic crises.
How China has managed the epidemic will have long-term economic repercussions for the economies of Asia.
