Washington DC: As there is an expected global recession around the corner, the International Monetary Fund (IMF) is closely watching the three big economies which drive global growth. The United States, Europe and China are experiencing a weakening, IMF said on Sunday, reports Reuters.
IMF Managing Director Kristalina Georgieva said that the new year would be tougher than the past one since the mentioned economies are slowing down simultaneously.
In view of the continuing war situation in Ukraine, inflation pressures and high rates of interest by central banks to rein in price pressures, IMF had brought down its outlook for global economic growth in October last.
Georgieva said that for the first time in 40 years, China’s growth is likely to be at or below global growth.
Further, a “bushfire” in Covid-19 cases is also expected globally in the upcoming months, and it could hit the economy harshly, too, hampering both regional and global growth.
She said that the upcoming two months would be particularly tough for China, and the slowdown in economic growth expected there would impact the region as well as the globe.
IMF had forecast in October that Chinese gross domestic product growth for 2022 was 3.2 per cent. However, annual growth in Chin accelerated in 2023 to 4.4%, against the global activity slowing further.
In the case of the US, Georgieva has a much better view. She said that the US economy is standing apart and may avoid an outright contraction, which is expected to affect a third of the global economies. She said that “the US is more resilient”. However, inflation in the country showed signs of passing its peak in 2022 end. It remains at nearly three times its target of 2 per cent.