The International Monetary Fund (IMF) is an international organization with 190 members that collaborate to stabilize the world’s economy. The IMF closely monitors economic and financial developments and offers support to countries in need, such as through guidance and aid. The current managing director of the IMF is Kristalina Georgieva, the first Bulgarian to hold this role.
In a recent broadcast on CBS’ Face The Nation, Georgieva warned that a third of the global economy is expected to enter into a recession due to the slowdown of the three major economic players, the United States, the European Union, and China. Georgieva further noted that while the US can avoid a recession, the European Union has already begun to slow down and this could have a significant effect on emerging markets.
China Crisis & Its Impact
December saw a surge in Covid cases in China, resulting in the country forcing its workers to go home and businesses to shut down. This led to China’s economy falling to its lowest level since the pandemic began. Global recessions have been estimated to have an approximately 25% chance of causing global GDP growth of 2% or less by 2023.
Impact on Cryptocurrency Markets
Recessions can have a major effect on the cryptocurrency market. During times of economic difficulty, people may be more likely to invest in safe assets, such as Bitcoin, which has seen a degree of stability in the face of economic uncertainty. On the other hand, the value of many cryptocurrencies can be subject to dramatic fluctuations due to market demand, government regulations, and general economic conditions, making predictions about the effects of a recession on these markets difficult.
