IMF Managing Director Kristalina Georgieva. AP.
Washington: For global economy, 2023 will be a tough year, “tougher than the year we leave behind”, warned IMF managing director Kristalina Georgieva. She further said, “We expect one-third of the world economy to be in recession.”
The warning from the International Monetary Fund (IMF) comes amid the Ukraine war, massive surge in Covid-19 cases, soaring prices, and higher interest rates that have been weighing on the global economy.
‘One-third of world economy to be in recession’
In an interview to CBS, Kristalina Georgieva said IMF expects one-third of the world economy to be in recession, because the three big economies — US, EU, China — are all slowing down simultaneously.
She further said, “Even countries that are not in recession, it would feel like recession for hundreds of millions of people.”
In December, the IMF Managing Director had said, “2023 is going to be a difficult year for the world. The silver lining is we can use it to transform economies and accelerate change that’s good for our climate, good for growth. At the IMF, we recognise our responsibility to be a force for good.”
IMF cuts outlook for 2023 global economic growth
The IMF, in October, had cut its outlook for global economic growth in 2023, reflecting the continuing drag from the war in Ukraine and inflation pressures as well as the high interest rates engineered by central banks including the US Federal Reserve.
Kristalina Georgieva said that China, the world’s second-largest economy, is likely to grow at or below global growth for the first time in 40 years as Covid-19 cases surge following the dismantling of its ultra-strict zero-Covid policy.
“For the first time in 40 years, China’s growth in 2022 is likely to be at or below global growth,” she said.
“For the next couple of months, it would be tough for China, and the impact on Chinese growth would be negative, the impact on the region will be negative, the impact on global growth will be negative,” the IMF Managing Director added.
‘US may avoid recession’
Kristalina Georgieva said that the “US is most resilient” and that it “may avoid recession. We see the labour market remaining quite strong.”
“This is… a mixed blessing because if the labour market is very strong, the Fed may have to keep interest rates tighter for longer to bring inflation down,” she said.
Read all the Latest News, Trending News, Cricket News, Bollywood News,India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram