IMF chief says 2023 will be tougher for the global economy than 2022, with a 'bush fire' of COVID-19 infections about to sweep China

Kristalina Georgieva, Managing Director of the International Monetary Fund.

Carsten Koall/Getty Images

• IMF chief Kristalina Georgieva told CBS News that 2023 will be a tougher year than 2022.
• The UN agency expects one third of the world economy to be in recession in 2023, she said.
• A "bush fire" of COVID-19 infections is about to sweep China, she added.

The head of the International Monetary Fund (IMF) has said that 2023 will a tougher year for the global economy than 2022.

"For most of the world economy, this is going to be a tough year, tougher than the year we leave behind," Georgieva said in an interview with CBS News' "Face the Nation" that aired Sunday. "Why? Because the three big economies — US, EU, China — are all slowing down simultaneously."

She added: "Even countries that are not in recession, it would feel like recession for hundreds of millions of people."

Georgieva told Face the Nation that the US economy was the "most resilient" and could avoid recession because its labor market was strong. However, this could mean interest rates remain higher for longer to bring inflation down, she said.

For 2022, China is expected to have grown in line with or below the global average for the first time in 40 years, Georgieva said. She attributed this to China's zero-COVID policy, which prompted protests across the country.

China has recently taken steps to relax its zero-COVID policy but this will "bush fire" infections nationwide "for three, four, five, six months," Georgieva told Face the Nation.

Half of the European Union will be in recession in 2023 because the Ukraine war has driven up energy and food prices, she said.

The situation for emerging markets was even more dire, she said, "because on top of everything else, they get hit by high interest rates and by the appreciation of the dollar. For those economies that have high level of that, this is a devastation."

The IMF has forecast that global growth will drop to 2.7% or less in 2023, compared with 6% in 2021 and 3.2% in 2022.

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