Recession will affect one third of the world economy in 2023, Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva has predicted.
This year will be tougher on the world economy than the one we left behind, she warned.
“Why? Because the three major economies — the U.S., the EU and China — are slowing down at the same time,” the IMF chief said in an interview broadcast Sunday on CBS. – “We expect one-third of the world economy to be in recession.
Even in countries whose economies won’t decline, “hundreds of millions of people will feel it as a recession,” she added.
While the U.S. may eventually avoid a recession, the situation looks bleaker in Europe, which has been hit hard by Russia’s war against Ukraine, Georgieva said. “Half of the European Union will be in recession,” she noted.
“For the first time in 40 years, China’s growth in 2022 is likely to be at or below global growth,” Georgieva said. – Before the COVID-19 pandemic, China accounted for 35-40% of global growth. It won’t be like that anymore.”
These are “pretty stressful” times for Asian economies, she said.
“When I talk to Asian leaders, they all start with the question: what will happen to China? Will China return to a higher growth rate?” she said.
Georgieva expects China to gradually move to a “higher economic performance and end the year with better results” than it began.
The IMF predicts that global GDP will increase by 2.7% this year after growing 3.2% in 2022.
