Global economic outlook has ‘darkened’: IMF

Lender projects further downgrade to growth in 2022 and 2023

WASHINGTON:

The global economic outlook has “darkened significantly” and could deteriorate further, the International Monetary Fund (IMF) managing director said on Wednesday, citing Russia’s war in Ukraine and the rapid inflation it has caused, threatening widespread hunger
and poverty.

The warning comes just months after the IMF cut its global growth forecast for 2022 and 2023.

The Ukraine war hit as the world was struggling to recover from the ongoing impact of the Covid-19 pandemic, and has caused an acceleration of inflation that endangers the gains of the past two years.

The international crisis lender is “projecting a further downgrade to global growth” in 2022 and 2023, Kristalina Georgieva said in a blog post published ahead of the meeting of G20 finance ministers and central bankers, scheduled for Friday and Saturday
in Bali.

“It is going to be a tough 2022 – and possibly an even tougher 2023, with increased risk of recession,” she wrote.

The IMF is due to release its updated World Economic Outlook later this month, which Georgieva said will further downgrade the estimate for global growth from the April estimate of 3.6%.

“We warned this could get worse given potential downside risks. Since then, several of those risks have materialised – and the multiple crises facing the world have intensified,” she said.

The outlook remains “extremely uncertain,” and Georgieva warned that the poorest will be hit
the hardest.

Published in The Express Tribune, July 14^th, 2022.

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