Is this what Putin is waiting for? What’s going on in the global economy
IMF (Photo:REUTERS / Yuri Gripas)
The IMF improved its forecast for global economics dynamics in 2023. The Fund is expecting now 2.9% growth. Previously it was 2.7%.
The change seems to be symbolic. But the main thing is the dynamic, and the fact that these changes affect [investors’] moods. And moods have an impact on investment decisions. And investment leads to growth.
Now the IMF does not expect a recession in Europe. It seems that only Putin, Medvedev and their friends continue to wait for it, a la Orban. But these guys at the same time are continuing to wait until Europe freezes over, so they have a double “joy”. And Pavel's victory in the Czech Republic shows that the bet that inflation will bring pro-Russian populists to power does not really work either.
The only country from the G7 whose economy is waiting for decline is Britain.
In 2023, UK GDP is expected to fall by 0.6%. A very good example of what populists can do even with a developed economy and functioning institutions.
First, the Brexit hit, which largely determines the current weakness of the British economy, and then the plans to "abolish taxes - increase spending - reduce tariffs" - and now you have already thrown back.
Another example of how dangerous referendums can be on difficult issues that democratic institutions were designed to resolve. And here on the emotions “we pay these bureaucrats” and “we will make Britain British again”, we get an economic crisis and a drop in living standards. Now the polls show that the British have already changed their minds, and today no Brexit would have happened. But it's too late.
It is good that there are no pro-Russian populists in Britain, at least among the parties that are being voted for, so the future defeat of the conservatives does not mean the coming to power of "Putin's friends”.
What can be scary here? Except the prospect of higher oil prices. What can help Putin, because he has restored sales volumes now, by hook or by crook, via gray and black schemes. And the fall in Russian budget revenues is mainly due to lower prices – a price that is defined as "good oil minus a big discount for toxicity". But if "good oil" grows, then Russian oil may rise in price. For us, the recession in the world, for which Putin and Co. fought so hard, would mean a sharper decline in the Russian economy. Well, instead of a sharp fall, the Russian economy will continue to slide down inevitably, but gradually, continuing to boil the frog.
Does this mean that all the worst for the global economy is over? No – just the baseline forecast is more optimistic now – without a recession in the U.S. and Europe, and without catastrophic consequences from rising rates. Namely, the growth in the cost of money in the framework of the fight against inflation created the main risks for the global economy. So far, inflation has been brought under control, as it seems, and the world economy has not been overwhelmed. Moreover, even in the stock markets, there have been no loud bursting bubbles so far.
And somewhere in the corner, Erdogan is proudly waiting for his election – with inflation at 80% and the Central Bank of Turkey, which is forbidden to increase the value of money, as part of the fight against inflation named after the economic genius Erdogan.
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