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Third of world in recession this year, IMF warns

IMF chief urges world to avoid a 'second Cold War'
Source: Video Screenshot

Kristalina Georgieva, the head of the International Monetary Fund (IMF), has warned that a third of the global economy will be in recession this year and that 2023 will be “tougher” than 2022 due to slowing economies in the United States, the European Union, and China.

“We expect one third of the world economy to be in recession,” Georgieva told CBS News on Sunday, according to the BBC.

“Even countries that are not in recession, it would feel like recession for hundreds of millions of people,” She continued.

The IMF chief also warned that China, the world’s second largest economy, will have a challenging start to 2023.

“China has slowed down dramatically in 2022 because of this tight zero-Covid policy. For the first time in 40 years China’s growth in 2022 is likely to be at or below global growth. That has never happened before.

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,” She stated.

The warning comes as the global economy is being weighed down by the ongoing Russia-Ukraine war, rising prices, higher interest rates, and a new wave of the Covid-19 pandemic in China.

According to the BBC, the IMF cut its global economic growth forecast for 2023 in October 2022 due to the war in Ukraine as well as higher interest rates as central banks around the world attempt to rein in rising prices.

Since then, China has abandoned its zero Covid policy and begun to reopen its economy, despite the fact that coronavirus infections have spread rapidly throughout the country.


About the author

Brendan Byrne

While studying economics, Brendan found himself comfortably falling down the rabbit hole of restaurant work, ultimately opening a consulting business and working as a private wine buyer. On a whim, he moved to China, and in his first week following a triumphant pub quiz victory, he found himself bleeding on the floor based on his arrogance. The same man who put him there offered him a job lecturing for the University of Wales in various sister universities throughout the Middle Kingdom. While primarily lecturing in descriptive and comparative statistics, Brendan simultaneously earned an Msc in Banking and International Finance from the University of Wales-Bangor. He's presently doing something he hates, respecting French people. Well, two, his wife and her mother in the lovely town of Antigua, Guatemala.

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