IMF Warns: 1/3 of Global Economies to Suffer Recession this Year

Jan 6, 2023 | News

One third of the world’s economies will be hit by recession this year, the managing director of the International Monetary Fund (IMF), Kristalina Georgieva, warned on Sunday. She said the new year would be “even tougher than the past one”.

“2023 is going to be a tough year for most of the global economies.” Georgieva said in a media interview on January 1, referring to the state of the global economy, which is due to the expected slowdown in the “main engines” of global growth, including the US and Europe. She added that the ravages of the new epidemic would also be a drag on global economic growth.
Georgieva’s latest comments suggest that the IMF may soon cut its global economic growth forecast for 2023 again. The IMF usually announces its latest forecasts at the World Economic Forum in Davos, Switzerland, later this month.
Georgieva also mentioned that the US “may avoid a recession”, partly due to its strong labor market. She said, “The US economy is very resilient ……. If that resilience holds through 2023, the US will help the world through a very difficult year.”

However, this view is at odds with most economists. Economists polled by the media expect the US unemployment rate to soar to 5.5% this year, and 85% of economists expect the country to experience a recession in 2023.
Michael Gapen, chief economist at Bank of America, also said in a media interview that the risk of a recession in the US was “high”, but that it “probably won’t be deep and prolonged”. “It’s not certain,” Gapen said, adding that 2023 could still be a difficult economic year as the Federal Reserve continues to raise interest rates to fight inflation.

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