A third of the world will be in recession this year, IMF warns

NEW YORK – The International Monetary Fund (IMF) warned that one third of the world economy of face recession this year, adding even countries that are not in recession would also feel the effects.

Georgieva said in an interview on CBS' Face the Nation said, “We expect one third of the world economy to be in recession. And yes, as you said, even countries that are not in recession, it would feel like recession for hundreds of millions of people”.

She said this year would also be tough for world's largest economies such as the United States, China and the European Union.

Another spike in Covid cases in China will serve blows to the world economy, Georgieva said of one of the largest exporters of cheap goods.

"For the next couple of months, it would be tough for China, and the impact on Chinese growth would be negative, the impact on the region will be negative, the impact on global growth will be negative," she said.

"For the first time in 40 years, China's growth is likely to be at or below global growth."

“When we look back over the last three decades, the world economy tripled because of this reliance on an integrated world economy,” she said, adding: “We were too focused on costs, how can we make products cheaper. And COVID and then the senseless war Russia started against Ukraine has shown that this is not enough. We cannot just concentrate on what is cheaper”.

"That means diversifying the sources of products that make the economy function well, lifting up the level of costs," she said.

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