The International Monetary Fund (IMF) has warned that one-third of the world economy will fall into recession this year.
IMF chief Kristalina Georgieva said 2023 will be tougher than last year, as the US, EU and China see their economies slow.
The fear comes as the war in Ukraine, rising commodity prices, high interest rates and the spread of Covid in China put pressure on the global economy. BBC news.
In October, the IMF lowered its global growth outlook for 2023.
“We expect one-third of the world economy to go into recession,” Georgieva told the CBS news program Face the Nation.
“Even in countries that are not in recession, hundreds of millions of people will experience recession-like conditions,” he added.
The IMF lowered its global economic growth outlook for October as central banks around the world tried to rein in rising commodity prices due to the Ukraine war as well as high interest rates.
China has since scrapped its zero covid policy and started restarting its economy. Even in the country, the coronavirus infection spread rapidly.
Georgieva warned that China, the world’s second largest economy, will have a tough start to 2023.
“The next few months will be difficult for China and the impact on Chinese growth will be negative, the impact on the region will be negative, the impact on global growth will be negative,” he said.
The IMF is an international organization with 190 countries. They work together to stabilize the global economy. One of its key roles is to act as an economic early warning system.
Figures released over the weekend hinted at weakness in the Chinese economy at the end of 2022.
China’s factory activity contracted for a third straight month and the fastest pace in nearly three years, the official Purchasing Managers’ Index (PMI) for December showed, as the coronavirus outbreak spread through the country’s factories.
Home prices in 100 cities fell for the sixth consecutive month in the same month, according to a survey by China Index Academy, China’s largest independent property research firm.