Monitoring Desk
ISLAMABAD: The new year will be “tougher” than the previous one as a third of the global economy is likely to be in recession in 2023, warns the head of the International Monetary Fund (IMF).
Kristalina Georgieva said that 2023 will be “tougher” than 2022 as the US, China and EU see their economies slow. It comes as the rising prices, war in Ukraine, spread of Covid in China, and higher interest rates weigh on the global economy. In October last year, the IMF cut its global economic growth outlook for 2023. Georgieva expected one third of the world economy to be in recession. According to Ms Georgieva even the countries that are not in recession would feel like recession.
According to BBC, the IMF cut its outlook for global economic growth in 2023 in October last year due to the war in Ukraine. Higher interest rates also compelled the IMF for the decision as central banks around the world attempt to rein in rising prices. Since then, China has terminated its zero-Covid policy and started to reopen its economy. The coronavirus infections have meanwhile, spread rapidly in the country.
Difficult start to new year
Ms Georgieva further warned that China will face a difficult start to the new year. It is to mention here that China is the world’s second largest economy. The next couple of months would be tough for China and the impact on Chinese growth would be negative. The impact on the region, according to Ms Georgieva will be negative and the impact on global growth will also be negative.
The IMF
The IMF is an international body with 190 member countries working together to stabilise the global economy. One of IMF’s key roles is to act as an early economic warning system. In December home prices in 100 Chinese cities fell for the sixth month in a row, according to a survey conducted by China Index Academy which is one of the country’s largest independent property research firms.
