Georgieva (IMF) warns: “It will be a tough year: a third of the world economy in recession”

MILAN – “It will be a tough year, tougher than the one we leave behind” and “a third of the world economy will go into recession”. This is the not very reassuring judgment expressed yesterday by the director general of the International Monetary Fund, Kristalina Georigeva in an interview with cbs. According to Gerogieva, the reasons behind this forecast are clear: “The three big economies, the USA, the EU, China, are all slowing down at the same time”, she explained, adding however that “the United States is the most resilient” and “could avoid the recession”. In the US “we see that the labor market remains quite strong. This is, however, a half-blessing because if the labor market is very strong, the Fed may have to hold tight on longer to bring inflation down” , he precised.

The indications coming from Europe are less promising. “It is hit very hard by the war in Ukraine. Next year, half of the European Union will be in recession,” said Georgieva who does not see positive signs even from China due to the Covid emergency. “It will slow down further this year. Next year will be difficult. And that translates into negative trends globally.” Gloomy forecasts also for emerging markets “because on top of everything else, they are hit by high interest rates and the appreciation of the dollar”, added the manager of the Fund.