Global economies are facing an even tougher 12 months than the one just past as the core powerhouse economies are all in decline, simultaneously.
In an interview with CBS, International Monetary Fund managing director Kristalina Georgieva, said: "For most of the world economy this is going to be a tough year, tougher than the year we leave behind. Why? Because the three big economies, US, China and EU are all slowing down simultaneously."
The institution is projecting global growth to be down to 2.7%, or even lower, by the end of the year, dropping from 3.2% in 2022. This was a long way off the 6% seen back in 2021.
By October last year, the IMF had downgraded its outlook for global economic growth for this year three times, from 3.2% for 2022 and 2.9% for 2023.
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In the recent interview, Georgieva said economic growth could go down even further if central banks get "cold feet" and steer off the current inflation fighting course.
She said, if the banks are deterred by slowing rate of growth and decide to "slow down the fight against inflation, we then risk inflation becoming more persistent".
The IMF's message to the central banks was: "You have to see a credible decline in inflation, and only then, you can think about recalibrating rate policy".
Discussing the other main drivers to the slowdown in global growth, Georgieva recognised China as a significant factor.
The country has the second largest economy in the world and pre-Covid it contributed 30-40% of global economic growth.
But since the pandemic began China's productivity levels have fallen dramatically as its strict Covid lockdown policies have persisted much longer than other countries.
"For the first time in 40 years, China's growth in 2022 is likely to be at or below global growth," Georgieva said.
The Chinese Communist Party decided to taper off its zero-Covid policy at the end of last year, which has led to a swell in Covid case numbers.
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Georgieva said that the negative impact of people not being able to go to work on growth would be counterbalanced by the positive outcome of the economy reopening.
She explained that given how reliant the world was on Chinese exports and its supply chains, "up until now, the biggest impact on inflation came from restrictions due to Covid...now we have the impact of people getting sick and not being able to go to work, but the economy would be open".
Georgieva said: "Gradually, [China] will move to a higher level of economic performance and finish the year off better than it started."
While this was arguably a bright spot, the IMF managing director added that it will not an easy year for any economy, including the much stronger US.
She said: "I hope that the US is not going to slip into a recession, despite all these risks.
"We expect one-third of the world economy to be in recession. And even countries that are not in recession, it would feel like recession for hundreds of millions of people.
"But if the resilience of the US labour market holds, that would help the world to get through a very difficult year."
