IMF's managing director shares a good news about the economy but World Bank warns the developing countries.

IMF managing director shares good news

                Good news everyone.......IMF's managing director Kristalina Georgieva has said that the global economic recession can be avoided this year. IMF expects that the global economic growth can rebound later this year, and the economic recession can be avoided if China eases its COVID restrictions, and the Russia-Ukraine war does not get worse.

IMF managing director Kristalina Georgieva

IMF's Statement:

               IMF managing director said on Thursday that the recent decline in global economic growth could be coming to an end soon. Remember that during the previous year, all the major economies of the world suffered because of the on-going war between Russia and Ukraine. Earlier this week, IMF had predicted that the year 2023 would be "Tough" for global economy, and that we would see recession again. Also, a few months ago (in October), IMF cut its Global Growth Forecast down from 2.9% to 2.7%, taking in consideration the rising interest rates, and the war in Ukraine.

               But now there's some hope that global economies might come out of recession as IMF chief Kristalina Georgieva said on Thursday, "Hopefully, we are going to see a reversal in this recession trend toward the end of 2023, and we might see a higher growth trajectory in 2024." She said, however, that despite this possible rise in economic growth, this year would still be tough as inflation and cost of living are the problems that are still to be solved. Moreover, she said there are certain challenges we'll have to face.

Challenges to the economy:

                Ms. Georgieva said we should hope the Russia-Ukraine war doesn't get any worse because if it does, we might see recession again. Also, the rise in interest rates can affect the labour market, but the major decisive factor will be China's COVID policy. China's economy has been facing a decline since 2020 because of its strict COVID policies. Luckily, China has now decided to end its lockdown policies, and everybody is hopeful that China will contribute to global economic growth again. In this context, Ms. Georgieva said it would be important for China to stay with its decision. 

Major Concerns:

                Although there are some good signs for the economies of developed countries, many poor countries are still expected to face default or recession because of heavy debt burdens. Also, earlier this week, World Bank projected that the global growth would slow to 1.7% this year which is way less than its previous prediction of 3%. World Bank also warned that the economies of developing countries would face "crises" this year. This statement of World Bank makes it complicated to guess whether there would be a recession this year or not.

What is economic recession?

                Economic recession can be defined as the period in which the economy or GDP shows weak or negative growth, that is accompanied by the rise in unemployment and inflation. Inflation is a loss of purchasing power over the time. Inflation can also be expressed as the annual increase in the prices of various goods. Thus, the increase in prices directly affects your purchasing power. Inflation is the result of weak economic growth, and it has harsh effects on developing countries.

                 We hope the prediction of IMF proves to be right, and the economy may rebound. That was it for today's article. We're now starting Twitter where you can follow us by clicking here. We hope you liked our article. If you did make sure you keep visiting "World Articles" for more of these interesting articles and recent global news.