News ID: 321137
Published: 0845 GMT April 19, 2022

IMF cuts global growth forecast

IMF cuts global growth forecast

The International Monetary Fund on Tuesday slashed its forecast for global economic growth by nearly a full percentage point, warning that inflation was now a "clear and present danger" for many countries.

The war is expected to slow growth and further increase inflation, the IMF said in its latest World Economic Outlook, while warning that its forecast was marked by "unusually high uncertainty."

In its latest World Economic Outlook, the global lender, which downgraded its forecasts for the second time this year, said it now projects global growth of 3.6% in 2022 and 2023, a drop of 0.8 and 0.2 percentage point from its January forecast, Reuters reported.

Medium-term global growth is expected to decline to about 3.3% over the medium-term, compared to an average of 4.1% in the period from 2004 to 2013, and growth of 6.1% in 2021.

Reduced supplies of oil, gas and metals produced by Russia, and wheat and corn — produced by both Russia and Ukraine — had driven up prices sharply in Europe, the Caucasus and Central Asia, the Middle East and North Africa, and sub-Saharan Africa, but was hurting lower-income households around the world.

The IMF said it had revised downward its medium-term outlook for all groups, except commodity exporters who benefit from the surge in energy and food prices.

It said advanced economies would take longer to recover to their pre-pandemic output trend, while the divergence between advanced and developing economies was likely to persist, suggesting some "permanent scarring" from the pandemic.

The IMF said inflation was now projected to remain higher for longer time, and it warned the situation could get worse if supply-demand imbalances deepened.

For 2022, it forecast inflation of 5.7% in advanced economies and 8.7% in emerging market and developing economies, a jump of 1.8 and 2.8 percentage points from January's forecast.

 

   
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