The head of the International Monetary Fund (IMF) has warned that a third of the global economy will fall into recession this year.
Kristalina Georgieva said 2023 will be “tougher” than last year as the US, EU and China see their economies slow.
The war in Ukraine, rising prices, higher interest rates and the spread of Covid in China are weighing on the global economy.
In October, the IMF lowered its outlook for global economic growth for 2023.
“We expect a third of the world economy to be in recession,” Ms. Georgieva said on the CBS news program Face the Nation.
“Even countries that are not in recession would feel like a recession to hundreds of millions of people,” she added.
- China begins reopening to the world in January
- What is the IMF and why is it important?
The IMF in October lowered its forecast for global economic growth in 2023 due to the war in Ukraine and higher interest rates as central banks around the world try to stem rising prices.
Since then, China has scrapped its zero-Covid policy and started reopening its economy, despite the rapid spread of coronavirus infections in the country.
Ms Georgieva warned that China, the world’s second largest economy, will have a rough start to 2023.
“The next few months would be tough for China, and the impact on Chinese growth would be negative, the impact on the region would be negative, the impact on global growth would be negative,” she said.
The IMF is an international organization with 190 member countries. They work together to try to stabilize the world economy. One of its main tasks is to act as an economic early warning system.
Figures released over the weekend pointed to weakness in the Chinese economy in late 2022.
The official Purchasing Managers’ Index (PMI) for December showed China’s factory activity contracted for a third straight month and at the fastest rate in nearly three years as coronavirus infections spread in the country’s factories.
In the same month, house prices in 100 cities fell for the sixth straight month, according to a survey by one of the country’s largest independent real estate research firms, China Index Academy.
On Saturday, President Xi Jinping, in his first public statements since the policy change, called for more effort and unity as China enters what he called a “new phase.”
Add Comment