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IMF Predicts Thailand and Southeast Asian Countries Will Suffer From Recession this Year

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IMF Predicts Thailand and Southeast Asian Countries Will Suffer From Recession this Year

(CTN News) – Thailand and other Southeast Asian nations will experience a recession this year, according to the president of the International Monetary Fund (IMF).

According to Kristalina Georgieva, a third of the world’s economies, including Thailand and Vietnam, will be in recession this year.

The 69-year-old economist from Bulgaria predicts 2023 will be “tougher” than 2018 due to the recession in the economies of the United States, the European Union, and China.

The confrontation between Russia and Ukraine, increasing costs, increased interest rates, and the spread of Covid-19 in China are all hurting the world economy, which is why this forecast was made.

“We anticipate a recession in one-third of the global economy. For hundreds of millions of people, it would seem like a recession, even in nations that are not experiencing one.

Katrina Ell, an economist at Moody’s Analytics in Sydney, Australia, echoes Georgieva’s gloomy forecast.

“While our baseline is that there won’t be a worldwide recession during the next year, the likelihood is uncomfortably high. The US is on the edge of a recession, but Europe will not be spared.

At the start of this year, a battle for China is what Georgieva foresees.

It will be difficult for China over the next months, which will have a detrimental effect on the country’s progress and that of the region and the world.

IMF

The IMF, which has 190 member nations, serves as an economic alarm clock for its members.

The Land of Smiles may have risen from its deathbed and drawn the curtains on a new post-Covid dawn, but Georgieva thinks Thailand is still not ready to jump into the pool.

The war between Russia and Ukraine is a major factor in Southeast Asia’s growing inflation. Additionally, both consumers and companies have been impacted by increasing borrowing rates.

Not just that. Statistics made public over the weekend showed that the Chinese economy was sluggish at the end of last year.

According to the official purchasing managers’ index for December, China’s industrial activity decreased for the third consecutive month and at its quickest pace in nearly three years as coronavirus infections ravaged the mainland’s industries.

Home prices in 100 cities decreased for the sixth month, according to a poll conducted by China Index Academy, one of the nation’s biggest independent real estate research organizations.

The US economy’s decline also implies less of a market for goods produced in Southeast Asian nations like Thailand and Vietnam.

Thailand exports a wide range of goods to the US, including agricultural products, rubber, and machinery.

Additionally, higher interest rates make borrowing more costly, which may prevent certain firms from growing.

Investors may withdraw funds from the economy due to a lack of growth, leaving poorer nations with less money to pay for essential imports like food and energy.

In these slowdowns, currencies lose value, exacerbating the problem.

Governmental economies are also impacted by increased loan interest rates, particularly in developing markets, which may find it difficult to pay back their debts.

The Asia-Pacific region has historically relied on China as a significant trade partner for financial help during difficult economic times.

Asian economies are now dealing with the long-term financial consequences of China’s response to the epidemic.

Related CTN News:

Morocco Bans Chinese Tourists Over COVID Outbreak

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