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For much of the global economy, the new year 2023 will be more difficult compared to the previous years, said the International Monetary Fund (IMF) on Sunday. The weakening of financial activities in the leading nations, the United States, Europe, and China, has hurt the global economy. 

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Kristalina Georgieva, IMF's Managing Director, said that 2023 is more challenging than the year we leave behind, Reuters news agency reported. She stated the reason for the global economy's downturn and said, "Because the three big economies, the US, EU, and China, all are slowing down simultaneously."

IMF's stance on global economic growth in 2023, released in October 2022, highlights the influence of the ongoing Russia-Ukraine war and the surge in inflation and interest rates. Central banks like the US Federal Reserve monitor such rates to impact the prices.

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The rejuvenation of China's economy marked its upliftment of the zero-Covid policy. Amid the surge in coronavirus cases, Chinese President Xi Jinping urged the citizens to put more effort as China enters a 'new phase.' However, Georgieva said, "For the first time in 40 years, China's growth will be equal to or below the global growth."

Georgieva warned that the rapid spread of COVID-19 infections would drag down the regional and global economy. The recent wave might get worse once people start travelling, she added.

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IMF will disclose the updated predictions during the World Economic Forum in Davos, Switzerland. 

Talking about the US economy, the IMF said the US might be able to avoid the direct torment of recession, unlike a third of the world's economies. As the US labour market is strong, it may be able to dodge the global recession, she added. 

However, it may hinder the high-interest rates imposed by the Federal Reserve Board to push down inflation. Fed officials will make the US job market their prime focus. 

Official data shows that the US economy created 200,000 jobs in December 2022. Moreover, the occupation front remains stable as the employment rate stayed at 3.7 per cent, one of the lowest since the 1960s.

(With inputs from agencies)

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