Kristalina Georgieva, director of the International Monetary Fund, announced this morning that a third of the world economy will enter a recession during 2023, including half of the European Union. Likewise, Georgieva maintains that the slowdown of the three large economies: the United States, the European Union and China, is taking place simultaneously and that this will mean that “for most of the world, 2023 is going to be a tough year.”
As far as Europe is concerned, the humanitarian crisis caused by the Russian invasion of Ukrainian territory has created an economic risk for all member countries, which today, according to the director of the IMF, their financial situation is “severely impacted” for this war that advances the recession to severely alarming levels during 2023.
On the other hand, Georgieva maintains that the US economy is much more “resilient” and her efforts to strengthen the labor market can help her “avoid recession while supporting the rest of the planet during a particularly difficult year.”
With regard to China, the effects of its zero Covid policies could lead to its economic development being “equal to or below the world level”, which will have a negative impact within its economy at a regional and global level, according to collected by the Europa Press and Efe agencies.
Anticipate the slowdown
Within this context, Georgieva has stressed that the intentions of the IMF consist of demonstrating how the slowdown of the world economy will stagnate, at least 2.7%, global growth over the next year, unlike 2021 when records were reached 6%, while in 2022 these increases dropped to 3.2%.
The director warns that “this translates into negative trends worldwide” in reference to developing sectors and emerging markets “where the outlook is even more serious” given that, in addition to everything, “they are hit by high interest rates and the appreciation of the dollar” and for the economies with the highest debts “it is a devastation”.
While struggling countries are not a problem for triggering a potential debt crisis right now, Georgieva says the world economy “could be in for a pretty significant surprise” if this list continues to boom. “I hope that the United States does not fall into recession despite all these risks,” said the director, since we are more dependent on this country today than at any other time in history.