In 2023, a third of the world will experience a recession, according to the International Monetary Fund (IMF).
This information was provided in an interview with CBS, an American broadcast television and radio network, by the IMF’s managing director, Kristalina Georgieva.
According to Georgieva, the economies of China, the European Union, and the United States are all slowing down at the same time.
“We expect one-third of the world economy to be in recession,” the IMF managing director said.
She said that even in non-recessionary nations, “Hundreds of millions of people would feel like a recession.” “This year, the European Union as a whole will experience a recession.”
She outlined how the rapid expansion of Covid-19 in China, particularly now that the containment strategy for the disease has been abandoned, foretells immediate economic issues. The IMF predicted earlier in October of last year that this year’s global growth would be 2.7%, down from 3.2% in 2022.
“For the next couple of months, it would be tough for China, and the impact on Chinese growth would be negative, ‘’ Georgieva said adding that she expects the country to move gradually to a higher level of economic performance, and finish the year better off than it is going to start the year.”
She added, “For the first time in 40 years, China’s annual growth is likely to be at or below global growth, meaning it could drag down worldwide economic activity rather than propelling it. That has never happened before.”
Georgieva also noted that the US might escape the worst of the downturn, due to its strong labour market.
“The US may avoid a recession because its unemployment is so low,” she said. “If that resilience holds in 2023 the US would help the world to get through a very difficult year. The US economy is remarkably resilient,” she added.
