Head of IMF predicts recession in EU and slowdown of world economy

Head of IMF Kristalina Georgieva: 2023 will be harder for the world economy than last year

Next year the world’s three largest economies, the U.S., China and the EU, will slow down, and this will happen simultaneously. The year ahead will be harder than last year, says Kristalina Georgieva.

The new year of 2023 will be hard for most of the world economy, as the major global growth engines – the U.S., Europe and China – will face a slowdown and weakening of economic activity. Kristalina Georgieva, chief executive officer of the International Monetary Fund, said this opinion in an interview with the U.S. channel CBS.

“This [recession] is what we’re going to face. For most of the world economy, the new year will be more difficult than the one we’re leaving behind. Why? Because the three major economies: the U.S., the EU and China will slow down at the same time,” said the head of the fund, excerpts from an interview with which were published on Twitter (the social network is blocked in Russia) of the TV channel.

According to her, the U.S. economy is more resilient and the U.S. can avoid recession, and even now the labor market in the country retains enough confidence. The EU, according to Georgieva, has been hit hard by the conflict in Ukraine. “Half of the EU will be in recession next year. China will continue to slow down further, next year will be difficult for China,” she said.

The IMF chief also predicts a worldwide rise in costs. “After the pandemic, supply chains are realigning, and manufacturers may not be chasing the cheapest labor and raw materials, but balancing the cost of production with business sustainability. That can raise costs,” she said.

Earlier, experts at the Center for Economic and Business Research (CEBR) said the world will face a recession in 2023. “It’s likely that the world economy will face a recession next year as a result of higher interest rates in response to higher inflation,” Kay Daniel Neufeld, director and head of forecasting at CEBR, told Bloomberg.