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Happy new year from the International Monetary Fund!

The new year is going to be “tougher than the year we leave behind,” IMF managing director Kristalina Georgieva said on CBS on Sunday morning.

“We expect one-third of the world economy to be in recession. Even countries that are not in recession, it would feel like a recession for hundreds of millions of people,” she added.

And it’s not like the IMF was optimistic about 2023 before. In October, the IMF cut its outlook for global economic growth in 2023.

And now things look, well, worse. Georgieva said that China, the world’s second-largest economy, is likely to grow at or below global growth for the first time in 40 years as Covid-19 cases surge following the dismantling of its ultra-strict zero-Covid policy. A “bushfire” of expected Covid infections there in the months ahead will likely further hit its economy and act as a drag on both regional and global growth, said she said. , who traveled to China on IMF business late last month.

If there’s any good news in the IMF view it’s that the U.S. economy may avoid the outright contraction that is likely to afflict as much as a third of the world’s economies. The “US is most resilient,” she said, and it “may avoid recession. We see the labor market remaining quite strong.” “This is … a mixed blessing because if the labor market is very strong, the Fed may have to keep interest rates tighter for longer to bring inflation down,” Georgieva said.