As South Africans entered 2023 in darkness as load shedding followed from the year we left behind, the International Monetary Fund (IMF) has sounded the alarm for the rest of the world as well, saying that a third of the world will be hit with a recession.
IMF chief Kristalina Georgieva during an interview with CBS, said the world would face a challenging year as the three major world economies are experiencing a slowdown, the United States, China and Europe.
"We expect one-third of the world economy to be in recession," she said, adding that even for countries that are not in recession: "It would feel like recession for hundreds of millions of people."
Georgieva warned that 2023 is going to be tougher on the global economy than the one left behind.
"Why? Because the three big economies, US, EU, China, are all slowing down simultaneously," she said.
The reasons for a global recession have been enumerated, like the Covid-19 pandemic, the geopolitical contests among great powers, the Ukraine war, and the rise in interest rates in response to higher inflation.
Speaking about US and Europe, she said that Washington may end up avoiding a recession, the situation looks more bleak in Europe, which has been hit hard by the war in Ukraine, she said.
"Half of the European Union will be in recession," Georgieva added. As per IMF projections, the global growth is at 2.7 per cent this year, slowing from 3.2 per cent in 2022.“
The next couple of months will "be tough for China, and the impact on Chinese growth would be negative," Georgieva said, adding that she expects the country to move gradually to a "higher level of economic performance, and finish the year better off than it is going to start the year,“ she further said.
Asian News International, with additional reporting by BR Reporter