The latest figures from the International Monetary Fund show that the global economy is facing huge pressure at the moment, and it could be a challenging year for global growth.
According to the IMF, some of the world’s biggest economies are now facing weakening economic activity, with Europe, the US, and China all facing difficulties.
These problems have been fueled by COVID-19 policies in China slowing down production and the war in Ukraine pushing up prices for essential items like food and gas.
Rising interest rates and inflation are also contributing to the crisis, which has resulted in the IMF lowering its predictions for economic growth in 2023.
In an interview with CBS, the IMF’s Managing Director Kristalina Georgieva said that this year will be “tougher than the year we leave behind.”
She added: “We expect one-third of the world economy to be in recession. Even countries that are not in recession, it would feel like a recession for hundreds of millions of people.”
She also warned that China, the world’s second-largest economy, will face a difficult year as its zero-Covid policy has caused disruptions to trade and supply chains.
“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.
Elsewhere, the US has been more resilient and the IMF says it may avoid a recession. However, for some countries, such as Ghana, Lebanon, and Sri Lanka, higher interest rates could have a devastating economic impact.
Georgieva also said the IMF predicts that “half of the European Union will be in recession next year” due to its dependence on Russian fuel and commitments to support Ukraine financially. EU institutions have provided the largest amount of emergency financing for Ukraine, spending $2.7 billion.