The Director of the International Monetary Fund (IMF) made a statement on the general economy in an interview published on January 1. “We expect one-third of the global economy to go into recession,” the president said. This situation, “what about cryptocurrencies?” brought the question to mind. Here are the details…
IMF chief: A difficult year is coming
Kristalina Georgieva came up with her new statements in an interview with CBS’s Face The Nation. Georgieva stated that we are facing a challenging year for the global economy. Moreover, she claimed that this year will be tougher than last year. The reason for this will be the slowdown of the world’s 3 largest economies, the USA, the EU and China. She also stated that the US can avoid a recession, but the EU is already slowing down, she said.
The nations were greatly affected by the outbreak of war between Ukraine and Russia. “Next year half of the EU will go into recession,” he said. Yet China is having a tough year. Georgieva added that emerging markets will be severely affected by the slowdown of major economies. If the slowdown becomes a trend globally, it will crash the market all over the world.
China reversed its Covid Zero policy in December after a large number of Covid positive cases. People were forced to stay at home and businesses came to a standstill. Economic activity in the country is experiencing its slowest since 2020, when the pandemic first hit.
Warns of recession
The IMF shared its expectation of a worldwide recession. Accordingly, the recession will affect more than a third of the world’s economies. There is a 25 percent chance that global GDP will increase by less than 2 percent in 2023. Georgieva studied the three largest economies and presented a contradictory picture of their resilience to the crisis in CBS. Manufacturing purchasing manager index figures released Monday point to lower values in Europe, Turkey and South Korea.
What about cryptocurrencies?
Data released this Tuesday are expected to reveal similarly bleak statistics for Malaysia, Taiwan, Vietnam, the UK, Canada and the US. However, the appearance of the world’s largest economy may offer some solace. The crypto market will face the consequences of the slowdown of the global economy. The recession will force investors to look for other options or withdraw money. However, investors may see Bitcoin investment as a hedge against the global recession.