Washington, January 3: According to CNN, IMF Managing Director Kristalina Georgieva said in an interview with CBS on Sunday morning that as the three major world economies in the United States, China and Europe are relaxing Slowly, the world will face a challenging year.
“We expect a third of the world economy to be in recession,” she said, adding that even for countries that weren’t in recession: “For hundreds of millions of people, it will feel like a recession.” EAM S Jaishankar said India-US relations have not been reduced to bilateral gains.
Georgieva warned that the impact on the global economy in 2023 will be tougher than the one left. “Why? Because the big three economies of the U.S., EU and China are all slowing down at the same time,” she said. What is a recession? How to Prepare for a Recession? As the risk of a global recession rises, here’s everything you need to know.
The reasons for the global recession have been cited, such as the COVID-19 pandemic, geopolitical rivalry between major powers, the war in Ukraine, and rising interest rates in response to higher inflation.
Turning to the U.S. and Europe, where she said Washington may end up avoiding a recession, the picture looks bleaker in Europe, which has been hit hard by the war in Ukraine, she said.
“Half of the EU will be in recession,” Georgieva added. The global economy will grow by 2.7% this year, down from 3.2% in 2022, according to IMF forecasts.
A slowdown in China will have dire global implications. The world’s second-largest economy will weaken sharply in 2022 as its strict zero-Covid policy disconnects China from the rest of the world, disrupts supply chains and disrupts the flow of trade and investment, according to CNN.
Chinese leader Xi Jinping said this weekend that he expects the Chinese economy to grow by at least 4.4% last year, a figure well above the forecasts of many economists but well below the 8.4% growth expected in 2021. According to the managing director of the International Monetary Fund, China’s economic growth in 2022 is likely to be at or below global growth levels.
“For the first time in 40 years, China’s growth in 2022 could be at or below global growth. Before Covid, China would achieve 34%, 35%, and 40% of global growth. It doesn’t do that anymore,” Georgier said. Wa said, adding that it was a “stressful” time for Asian economies.
Beijing ditched Covid restrictions in early December, and while its reopening may provide some much-needed relief to the global economy, the recovery will be shaky and painful, according to CNN.
“When I talk to Asian leaders, they all start with the question, ‘What will happen to China? Will China return to higher levels of growth?'” she said.
China’s haphazard reopening unleashed a wave of COVID-19 cases that overwhelmed the healthcare system, dampening consumption and production in the process.
Georgieva said the next few months “will be difficult for China and the impact on Chinese growth will be negative,” adding that she expects the country to gradually move toward “a higher level of economic growth.” performance, and to end the year in a better way than at the beginning of the year.”
(This is an unedited and auto-generated story from a Syndicated News feed, the content body may not have been modified or edited by LatestLY staff)