A third of the world will fall into recession in 2023, warns IMF boss

A third of the world will fall into recession this year, the head of the International Monetary Fund (IMF) warned.

Kristalina Georgieva, the fund’s managing director, said the world is facing a “more difficult” year than the previous 12 months, which were themselves marred by war and skyrocketing energy prices, as well as rising inflation and rising interest rates.

In an interview with the US news network CNBC, Georgieva stressed that the economies of the US, China and the European Union were slowing down at the same time.

“We expect a third of the global economy to be in recession,” she said, adding that this could rise to half for the EU economy.

Meanwhile, Georgieva said, China’s fast-growing Covid-19 outbreak following the country’s decision to relax its ultra-tight containment measures would have a “negative” impact on both the domestic economy and the rest of the world.

She added that China’s growth this year is likely to be equal to or lower than global growth, causing the country to drag down global economic activity rather than boost it, a situation that was “never seen before.”

Predictions of tough times ahead were echoed by advertising agency boss Sir Martin Sorrell, who warned that in the long run the world would have to “learn to live with more inflation…higher interest rates and more volatility than we’ve become accustomed to” ‘.