IMF MD warns, “Third of world in Recession” this year…….

Last Updated on January 2, 2023 by admin

One third of global economy will be hit by recession this year, IMF’s (International Monetary Fund) MD Kristalina Georgieva warned. While the US “may avoid a recession”, half of European Union will be in recession, she said. Georgieva also noted that China’s annual growth is likely to be at or below global growth for the first time in 40 years.

Georgieva said that China, the world’s second-largest economy, is likely to grow at or below global growth for the first time in 40 years as COVID-19 cases surge following the dismantling of its ultra-strict “zero-COVID” policy. “That has never happened before. And looking into next year, for three, four, five, six months the relaxation of COVID restrictions will mean bushfire COVID cases throughout China,” Georgieva said. “I was in China last week, in a bubble in the city where there is ‘zero COVID’. But that is not going to last once the Chinese people start travelling.” Georgieva said that she expected China’s growth to improve towards the end of the year but there are concerns about its longer-term trajectory. “Before COVID, China would deliver 34, 35, 40 percent of global growth. It is not doing it anymore. It is actually quite a stressful for … the Asian economies. When I talk to Asian leaders, all of them start with this question, ‘What is going to happen with China? Is China going to return to a higher level of growth?’”

Meanwhile, the EU has been especially hard hit by the war in Ukraine, with half of the bloc expected to be in recession this year, Georgieva said. The IMF chief said, however, that the US economy has stood out for its resilience and could outright avoid contraction this year.

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