the President of International Monetary Fund (IMF)Kristalina Georgieva, affirmed that a third of the global economy will enter recession in 2023. According to them, this year will be “more difficult” than 2022, due to the slowdown in the economies of the United States and China, the continuation of the war in Ukraine, and rising inflation and interest rates in much of the world.
In an interview with the American television station CBS, Kristalina reckoned “that by 2023 a third of the global economy will be in recession”. “Even in countries that aren’t in recession, there will be a slowdown for hundreds of millions of people this year,” he said.
In October, the IMF revised downwards the outlook for global economic growth in 2023. After that, China relaxed the restrictions of the Covidzero policy and started to reopen the economy. Nevertheless, according to Kristalina, the prognosis is not positive. “The coming months will be difficult for China. The impact on Chinese growth will be negative, the impact on the region will be negative, and the impact on global growth will be negative,” he said.
Technically, a country enters a recession when gross domestic product (GDP), the sum of all wealth, falls for two consecutive quarters. In practice, a drop in GDP means that the country’s economic activity slows down or shrinks, which implies a drop in business activity in general and consequently, for example, in family income and employment levels.