IMF Warns One-Third Of World’s Economy Will Encounter Recession This Year
According to projections by the IMF, which estimates that one-third of the world would experience a recession this year, Kristalina Georgieva, the IMF’s head, the global economy will be more difficult this year.
The continued Russia-Ukraine conflict, the COVID-19 virus’s reappearance in China, and suffocating inflation indices not just on the African continent but among some of the world’s largest economies all had an impact on numerous countries in 2022.
When describing the IMF‘s October projection for world economic growth through 2023, Georgieva insisted that even the strongest economies might not be immune to the recession’s long-lasting effects.
On the CBS news program Face the Nation, she stated, “We anticipate that one-third of the global economy will be in recession, Hundreds of millions of people would experience it as a recession, even in nations that are not experiencing one.”
The 59-year-old economist added that as they continue to battle the pandemic that has hampered output, the Chinese economy should also anticipate slow development.
She predicted that the coming months would be difficult for China, which would have a detrimental effect on the country’s progress as well as that of the region and the entire world.
She claims that because of its robust labor market, the US has a higher chance of avoiding global contractions.
“The US economy is astonishingly robust… (and) may avoid recession. We expect the labor market to stay pretty robust,” she added.
Set Your Budgets First
Speaking also about the debt profiles of various countries, Georgieva asserted that some level of “alarm” was required because several of these countries had borrowed more than was recommended.
“Money is not cheap anymore since Russia invaded Ukraine and it gave inflation further impetus, so our advise to the government is to focus on your budgets and make sure you have enough revenues to collect and you spend very prudently,” she said.
The world is becoming more shock-prone, as we have learnt from the past few years, and we are no longer able to operate in a somewhat predictable manner on what the future holds.
“That means that governments need to adopt a more resilient mindset and adopt more preventative measures.” The picture for emerging markets in developing economies, she continued, was even more dismal as a result of interest rate increases and a strong US dollar.
