A third of the global economy is expected to be in recession by 2023, says the IMF chief

New Delhi
CNN:
–

The head of the International Monetary Fund (IMF), Kristalina Georgieva, has warned that this year will be tougher for the global economy than the one we left behind.

“Why? Because the big three economies — the US, the EU, China — are all slowing down at the same time,” he said in an interview broadcast on CBS Sunday.

“We expect a third of the world economy to be in recession,” he said, adding that even for countries that are not in recession.

While the U.S. may eventually avoid a recession, the picture looks bleaker in Europe, which has been hit hard by the war in Ukraine, he said. “Half of the European Union will be in recession,” Georgieva added.

The IMF currently forecasts global growth to reach 2.7% this year, slowing from 3.2% in 2022.

A slowdown in China would have dire effects around the world. The world’s second-largest economy weakened sharply in 2022 due to its tough anti-Covid policy, which left China out of sync with the rest of the world, disrupting supply chains and hurting the flow of trade and investment.

Chinese leader Xi Jinping said this weekend that he expected China’s economy to grow at least 4.4 percent last year, much stronger than many economists had predicted but much lower than the 8.4 percent growth in 2021. :

“For the first time in the last 40 years, China’s growth in 2022 is likely to be at or below the global growth rate,” Georgieva said. “Before Covid, China will provide 34, 35, 40 percent of global growth. It doesn’t do that anymore,” he said, adding that it was a “pretty stressful” time for Asian economies.

“When I talk to Asian leaders, they all start with this question. “What will happen to China? Is China about to return to a higher level of growth? ” he said.

Beijing lifted its Covid restrictions in early December, and while its reopening may provide some relief to the global economy, the recovery will be erratic and painful.

China’s haphazard reopening has unleashed a wave of Covid cases that have been suppressed. the health system by reducing the consumption and production process.

The next few months “will be difficult for China and the impact on China’s growth will be negative,” Georgieva said, adding that she expected the country to gradually move “to a higher level of economic performance and finish the year better.” than the year will start.”