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• Risks and crises have intensified since April downgrade
The International Monetary Fund (IMF) warned it will again slash down the global economic forecast as the impacts of Russia’s invasion of Ukraine, pandemic-related shutdowns in China and higher inflation are slowing down the growth.
The outlook for this year and next will be downgraded later this month when the IMF will release its World Economic Outlook Update, Managing Director Kristalina Georgieva wrote in a blog post published Wednesday.
“The outlook remains extremely uncertain,” she wrote. “It is going to be a tough 2022 — and possibly an even tougher 2023, with increased risk of recession.”
However, Georgieva did not provide any specific figures in her blog.
IMF had downgraded the global expansion of 2022 to 3.6%, from 4.4% in April, and the upcoming lowering would be the third downgrade this year.
The global recovery from the COVID-19 pandemic has been compromised by surging prices on the back of the Russia-Ukraine war and a slowdown in China amid renewed coronavirus cases.
Stronger inflation is also forcing central banks to raise interest rates to cool down price growth but that risk tipping economies into recessions.
“The global economic outlook has darkened considerably, while inflation remains high,” the IMF said, adding that recent indicators point to a “very weak” second quarter.
Georgieva’s comments on the global gross domestic product (GDP) come a day after she raised the alarm on a worldwide debt crisis as central banks raise interest rates to curb inflation.
Separately on Tuesday, the IMF downgraded its forecast for US GDP for this year and 2023, warning that a surge in inflation poses “systemic risks” to the country and the global economy.
Picture Credit: IMF
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