Kristalina Georgieva, the head of the International Monetary Fund (IMF), believes that the United States will not enter a recession this year and will instead experience a “gentle landing” of its economy.
Georgieva cites the resilience of the United State labor market and continued consumer demand as reasons for this positive outlook, despite recent interest rate increases aimed at controlling inflation.
The Executive Director of the International Monetary Fund (IMF) stated that the current economic shift away from over-consumption of goods, which had been driving up prices, towards a renewed focus on services and diversified sources of growth is healthy for the economy.
Furthermore, she indicated that the discussions surrounding a potential recession are common, but based on the current evidence, it appears that the US economy is moving towards a “soft landing” scenario. The International Monetary Fond (IMF) forecasted US GDP growth of 1 percent in 2023, and will update its projection later this month, and The World Bank also forecasted US growth of 0.5 percent for this year, further supporting the idea that the United State economy is not heading towards a recession.
“As long as people are employed, even if prices are high, consumers spend…. But we all know that the impact of tightening financial conditions is yet to bite, in terms of unemployment,” Georgieva told reporters on Thursday in a briefing on the world economy.
“Inflation remains stubborn, and in that sense, the job of central banks is not yet done,” she said. Overall, Georgieva’s assessment of the United State economy is positive and she believes that it will continue to grow and avoid a recession.
