A third of the world economy would be in recession by 2023, warns the head of the IMF

What will the global economy be like in 2023?

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(CNN) --

This year is going to be tougher on the global economy than the one we've left behind, International Monetary Fund (IMF) chief Kristalina Georgieva has warned.

"Why? Because the big three economies, the United States, the European Union and China, are slowing down simultaneously," he said in an interview that aired Sunday on CBS.

“We anticipate a third of the world economy to be in recession,” he said.

And he added a caveat even for countries not in recession: "It would feel like a recession for hundreds of millions of people."

While the US may end up avoiding a recession, the situation looks bleaker in Europe, which has been hit hard by the war in Ukraine, he said.

“Half of the European Union will be in recession,” Georgieva added.

• First on CNN: The US economy will plunge into a mild 1990s-style recession next spring, according to Fitch

The IMF currently projects global growth of 2.7% this year, a slowdown from 3.2% in 2022.

How will China save its economy?

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The slowdown in China will have a dire impact globally.

The world's second-largest economy weakened sharply in 2022 due to its rigid zero-COVID policy, which left the country out of sync with the rest of the world, disrupting supply chains and damaging the flow of trade and investment.

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Chinese leader Xi Jinping said this weekend that he expected the country's economy to expand by at least 4.4% last year, much stronger than many economists had forecast but far less than expected. growth rate of 8.4% observed in 2021.

“For the first time in 40 years, China's growth in 2022 is likely to be equal to or less than global growth,” Georgieva said.

“Before the covid, China generated 34, 35, 40% of global growth.

He's not doing it anymore,” she said.

She added that it is a "quite stressful" period for Asian economies.

“When I talk to Asian leaders, they all start with this question: 'What is going to happen to China?

Is China going to return to a higher level of growth?'" she said.

Beijing lifted its Covid-19 restrictions in early December, and while its reopening may provide some much-needed relief to the global economy, the recovery will be erratic and painful.

China's haphazard reopening has unleashed a wave of Covid-19 cases that have overwhelmed the health care system, slowing consumption and production in the process.

The next few months “will be difficult for China, and the impact on Chinese growth would be negative,” Georgieva said, adding that she expects the country to gradually move towards a “higher level of economic performance and end the year better than it is.” to start it”.

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