A third of the world will fall into recession this year, the head of the International Monetary Fund (IMF) has warned.
Kristalina Georgieva, the fund’s managing director, said the world faces a ‘tougher’ year ahead than the previous 12 months, which themselves were marred by war and skyrocketing energy prices as well as surges in inflation and rising interest rates.
In an interview with US news network CNBC, Georgieva highlighted that the economies of the US, China and the European Union were all slowing down simultaneously.
Grim outlook: IMF boss Kristalina Georgieva (pictured) said the world faces a ‘tougher’ year ahead than the previous 12 months
‘We expect one-third of the world economy to be in recession,’ she said, adding that this would increase to half for the EU’s economy.
Meanwhile, Georgieva said, the rapidly growing Covid-19 outbreak in China following the country’s decision to relax its ultra-strict containment measures would have a ‘negative’ impact on both its domestic economy and the wider world.
She added that China’s growth this year was likely to be the same or less than global growth, resulting in the country dragging down world economic activity rather than boosting it, a situation that had ‘never happened before’.
Predictions of difficult times ahead were shared by ad agency boss Sir Martin Sorrell, who warned that in the long term the world would need to ‘learn to live with more inflation…higher interest rates and more volatility than we’ve become accustomed to’.
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