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Why IMF fears could be how Labour win 2023

China doing what China does

As TDB has been pointing out for some time, I don’t believe the looming economic crisis is being fully appreciated here in NZ.

Every red light is flashing a warning now, the slashing the IMF just made to global growth next year is eye watering…

IMF cuts global growth forecast for next year, warns ‘the worst is yet to come’

    • The International Monetary Fund predicts global growth will slow to 2.7% in 2023.
    • “The worst is yet to come, and for many people 2023 will feel like a recession,” the report reads.
    • Its GDP estimate for this year remained steady at 3.2%, which was down from the 6% seen in 2021.

…this follows a similar warning in America by banking God Jamie Dimon…

US is headed for a recession, says head of JP Morgan Chase bank: ‘This is serious’

The US and global economy is facing a “very, very serious” mix of headwinds that is likely to cause a recession by the middle of next year, warned Jamie Dimon, chief executive of JP Morgan Chase, the largest US investment bank, on Monday.

Dimon pointed to the effects of runaway inflation, sharp interest rate rises and Russia’s war in Ukraine, as factors that informed his thinking. But he added that the US was “actually still doing well” and consumers were likely to be in better shape compared with the global financial crisis in 2008.

…and the worst economic indicators to come out of China for 7 years…

TDB Recommends NewzEngine.com

China’s holiday spending plunges to seven-year low as zero-Covid batters consumer confidence

Holiday spending during China’s Golden Week has plunged to its lowest level in seven years, as broad Covid curbs discouraged people from traveling or spending, while a darkening economic outlook continues to erode consumer confidence.

…where this all lands is the real possibility of an enormous shock wave to the economy next year.

This shockwave will crest in our election year and it will cause an enormous crisis.

That cuts all ways for the political spectrum.

The one thing Labour are good at is managing a crisis, and if the economic shockwaves are as bad as all indications suggest it could be, Jacinda and Grant have the capacity and experience to lead through another crisis which National simply don’t have.

National’s Achilles heel is that they haven’t costed out their tax cuts and in an environment where we may have a true economic meltdown, the market will do to NZ what it did to the UK when Liz Truss tried her right wing free market lunacy.

Catastrophic climate change, an escalation in the Ukrainian war and the global economy collapsing will demand a response from our leaders that goes beyond the basic tax cut bullshit.

 

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