“We expect one-third of the world economy to be in recession,” Georgieva told CBS’s ‘Face the Nation’ in an interview aired Jan. 1. “Why? Because the three big economies — US, EU, China — are all slowing down simultaneously.”
The IMF already warned in October that more than a third of the global economy will contract and that there is a 25% chance of global GDP growing by less than 2% in 2023, which it defines as a global recession.
Examining the three biggest economies on CBS, Georgieva painted a mixed picture of their ability to withstand the downturn.
While “the US may avoid recession,” the European Union has been “very severely hit by the war in Ukraine — half of the EU will be in recession next year,” she said. At the same time, China faces a “tough year.”
The negative economic consequences of the war in Ukraine were rapidly priced into European stocks last year. However, a crisis needs to be seen to be getting worse, if it is to continue to exert an influence on prices.Click HERE to subscribe to Fuller Treacy Money Back to top