According to Kristalina Georgieva, the managing director of the International Monetary Fund (IMF), poorer countries will be hardest hit by the economic recession that is predicted to affect one third of the world’s economies this year. Georgieva specifically mentioned Chad, Ethiopia, Zambia, Ghana, Lebanon, Surinam, and Sri Lanka as being among the countries that will be most affected.
Georgieva attributed this dire forecast to several factors including the war in Ukraine, rising inflation and interest rates, and the COVID-19 situation in China. She warned that poorer countries will be the most affected by the economic recession and cautioned against a potential debt crisis if countries do not curb their spending following the heavy borrowing during the pandemic. Georgieva also emphasized the need to rethink global supply chains but cautioned against decisions that would make products too expensive.
It is likely that Ethiopia will be particularly vulnerable to the impacts of an economic recession, given its already fragile economic situation. Ethiopia is classified as a low-income country and has a largely agricultural economy, with a significant proportion of its population working in the sector. The country has faced several challenges in recent years, including frequent drought and a large and growing population. These factors, along with other economic and political issues, have contributed to a high level of poverty and economic inequality in Ethiopia. An economic recession could further exacerbate these challenges and make it more difficult for the country to address its development needs and improve living standards for its population.