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The IMF believes that China’s growth will suffer a sharp slowdown and drag down the rest of the world

Xi Jinping (Reuters)
Xi Jinping (Reuters)

For much of the World economy2023 will be a difficult year as the main engines of growth, the United States, Europe and China, will experience weakening activity, International Monetary Fund Managing Director Kristalina Georgieva said on Sunday.

The new year is going to be “harder than the year we left behind”, Georgieva said on the chain CBS. “Why? Because the three largest economies, the United States, the European Union and China, are slowing simultaneously”, he assured.

For the first time in 40 years, China’s growth in 2022 is likely to be equal to or less than global growthGeorgeva said.

The director of the IMF, Kristalina Georgieva (REUTERS/Michele Tantussi/File)
The director of the IMF, Kristalina Georgieva (REUTERS/Michele Tantussi/File)

In addition, it is likely that a strong boom in infections of covid expected there in the coming months will further affect its economy this year and drag down regional and global growth, Georgieva said.

“I was in China last week, in a bubble in a city where there is no COVID,” he said. “But that’s not going to last once people start traveling.”

“Over the next few months, it will be difficult for China and the impact on Chinese growth will be negative, the impact on the region will be negative, the impact on global growth will be negative“, he claimed.

People watch a live broadcast of a speech by XI Jinping, on the Wangfujing shopping street in Beijing (AP)
People watch a live broadcast of a speech by XI Jinping, on the Wangfujing shopping street in Beijing (AP)

In October, the IMF cut its outlook for global economic growth in 2023, reflecting continued pressure from the war in Ukraine, as well as inflationary pressures and high interest rates engineered by central banks like the Federal Reserve that aim to contain them.

China has since removed its zero COVID policy and embarked on a chaotic reopening of its economy, although consumers remain cautious as coronavirus cases rise. In his first comments to the public since the change, President Xi Jinping in a New Year’s address on Saturday called for greater effort and unity as the country enters a “new phase.”

Also, Georgieva predicts that half of the countries of the European Union, whose economies are “severely impacted” by the war in Ukraine, will enter a recession in 2023.

Instead, he sees the US economy as more “resilient” and trusts that the strength of its labor market will help him “avoid recession” and even “sustain the world in a very difficult year.”

(With information from Reuters and EFE)

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