Global Recession Is Coming, Warns IMF Chief – What is Means For Cryptocurrency Market

The International Monetary Fund (IMF) is an international organization with 190 member countries. They cooperate in an effort to stabilize the world economy. By tracking economic and financial events, the IMF monitors and supports the economy. It keeps track of how countries are functioning and possible threats, such as trade conflicts or uncertainties. Offering its members with economic guidance,  providing aid and short-term loans to struggling nations. 

Kristalina Georgieva is the managing director of IMF and has been so since 2019. Ms Georgieva is the first Bulgarian to lead the IMF. 

IMF Chief warns of a global recession

In an interview aired on CBS’s Face The Nation on January 1st, International Monetary Fund Managing Director Kristalina Georgieva declared, “we expect one-third of the global economy to be in recession.” The cause for this will be the slowing of the world’s three largest economies, the United States, the European Union, and China.

She also stated that the United States can avoid a recession, but the European Union has already slowed. The nations have been greatly impacted by the outbreak of war between Ukraine and Russia. The slowing of major economies would have a significant influence on emerging markets, Georgieva added. The slowdown becomes a global trend, bringing the entire global market down with it. 

The crisis in China

Following the enormous number of Covid positive cases in December, China compelled its people to remain at home, and business operations came to a halt. The country’s economic activity has been at its slowest since 2020, when the pandemic first struck.

More than a third of the economies in the world will be impacted by a global recession, and there is a 25% chance that the global GDP would only grow by 2% or less through 2023.

Impact on the crypto markets

Recessions can have a significant impact on the cryptocurrency industry. During times of economic downturn, people may be more inclined to invest in safe-haven assets such as Bitcoin, which has a history of being relatively stable during times of economic uncertainty.

On the other hand, the prices of many cryptocurrencies can be highly volatile, and the value of a particular cryptocurrency may be influenced by a variety of factors, including market demand, government regulations, and overall economic conditions. As a result, it is difficult to predict how the cryptocurrency market will react to a recession.