- The conflict in Ukraine has had a devastating impact on the European Union.
- She also predicted that China’s growth will decline much lower this year.
In an interview broadcast on CBS on Sunday, Kristalina Georgieva, managing director of the International Monetary Fund (IMF), discussed the IMF’s outlook for the economies of the United States, the European Union, China, and the globe.
She stated:
“This is what we see in 2023. For most of the world economy, this is going to be a tough year, tougher than the year we leave behind. Why? Because the three big economies, U.S., EU, China, are all slowing down simultaneously.”
Dire Consequences
The conflict in Ukraine has had a devastating impact on the European Union. A recession will hit half of the EU member states in 2023. She also predicted that China’s growth will decline much lower this year.
The IMF chief added:
“The U.S. is most resilient. The U.S. may avoid recession. We see the labor market remaining quite strong. This is, however, a mixed blessing because if the labor market is very strong, the Fed may have to keep interest rates tighter for longer to bring inflation down.”
Furthermore, the situation becomes much bleaker when we consider the burgeoning markets in underdeveloped nations as per Kristalina. This is because rising borrowing rates and the strengthening of the currency are additional hardships. She emphasized the dire consequences for economies with a large concentration of it.
Moreover, Georgieva said, in the near term, negative news, referring to the current state of affairs in China. Since 2022, when this strict zero Covid policy was instituted, China has slowed down significantly.
