“Why ? Because the big three economies – US, EU, China – are all slowing simultaneously,” she explained. The IMF warned in October that more than a third of the global economy would contract and that there was a 25% chance that global GDP would grow by less than 2% in 2023, corresponding to a recession. world.
Looking at the world’s three largest economies, Ms Georgieva painted a mixed picture of their ability to weather the forecast slowdown. While “the United States can avoid recession”, the European Union has been “very badly affected by the war in Ukraine – half of the EU will be in recession next year”, she said. . For its part, China is facing a “difficult year”, she said. The latest data showed China’s abrupt reversal of its Zero Covid policy pushed economic activity in December to the slowest pace since February 2020, as the virus spread through major cities, pushed people to stay at home and caused businesses to close.
The slowdown in the largest economies “translates into negative trends globally – when we look at emerging markets in developing economies there, the picture is even bleaker,” Georgieva noted. However, the outlook for the world’s largest economy may offer respite. “If this resilience of the American labor market continues, the United States would help the world through a very difficult year,” said the managing director of the IMF.