IMF managing director Kristalina Georgieva has issued a warning that this year will see a recession in a third of the world’s economies.
On Sunday, Georgieva participated in a broadcast television and radio interview with CBS.
She claimed that 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.
Georgieva continued by saying that the short-term economic impact of Covid-19’s quick expansion in China, particularly now that the government has abandoned its strict containment policy, will be devastating.
Due to the spread of the fatal illness, she predicted that China will face “difficult times” over the upcoming few months.
She said the next couple of months will be “tough for China” due to the spread of the deadly virus.
The head of the IMF anticipates that in 2023, the rate of global economic growth would fall to 1.8 percent, in line with the prediction of Goldman Sachs, a major international investment bank.
The IMF had lowered its projection for global economic growth in 2023 in October, noting the ongoing negative effects of the conflict in Ukraine as well as inflationary pressures and interest rate increases by significant central banks.
“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,” Georgieva said.
China’s annual growth is projected to be at or below global growth for the first time in 40 years, which might inhibit rather than stimulate global economic development. Never has that occurred before.
Georgieva added that the US is probably going to avoid the worst of the recession and that its robust labor market would probably help it outperform most other major economies.