Half of the European Union and one-third of the world face recession in 2023, IMF warns
YEREVAN, January 3, /ARKA The new year is going to be "tougher than the year we leave behind," IMF Managing Director Kristalina Georgieva said on CBS’s show Face the Nation on Sunday. "We expect one-third of the world economy to be in recession," Georgieva said, according to news reports.
"Even countries that are not in recession, it would feel like a recession for hundreds of millions of people," she added.
Georgieva said “half of the European Union will be in recession next year” and mentioned Europe’s determination to become independent from Russian energy, despite having to cope with what could be a tough winter an increase in energy prices.
She also spoke about the need to support Ukraine financially. 'So far, out to the international financial institutions, we have provided the largest amount of financing for Ukraine, $2.7 billion (€2.5 billion) in emergency financing, and we are working for 2023 to be a significant part of the support for Ukraine,” she stated.
Georgieva warned that China, the second-largest economy, would see a difficult start to 2023.
"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 said.
It comes as China has scrapped its zero-COVID policy and embarked on a chaotic reopening of its economy, though consumers there remain wary as coronavirus cases surge.
Georgieva said the US economy is standing apart and may avoid the outright contraction that is likely to afflict as much as a third of the world's economies.
The "US is most resilient," she said, and it "may avoid recession. We see the labour market remaining quite strong".
The IMF director also said high interest rates and the depleting dollar are devastating for many countries, such as Chad, Ethiopia, Zambia, Ghana, Lebanon and Sri Lanka.
She said the IMF must solve the debt problem in those countries. “This is why at the IMF, we are working very hard to press for debt resolution for these countries,” Georgieva said. -0-
