The International Monetary Fund (IMF) on Tuesday released its latest World Economic Outlook, predicting that the global economy will grow 3.6 % in 2022, down 0.8 % points from its January forecast.
The IMF believes the conflict and western sanctions on Russia have caused a humanitarian disaster, pushed up global commodity prices, disrupted Labour markets and international trade, and destabilised global financial markets. In response to high inflation, several economies around the world raised interest rates, leading to a reduction in risk appetite among investors and a tightening of global financial conditions. In addition, a shortage of COVID-19 vaccine in low-income countries could lead to new outbreaks.
As a result, the IMF slashed its forecast for global economic growth this year and forecast global growth of 3.6 per cent in 2023, down 0.2% points from its previous forecast.
Specifically, advanced economies are expected to grow by 3.3 % this year, down 0.6 % points from the previous forecast. It will grow 2.4 per cent next year, down 0.2 % points from its previous forecast. Emerging market and developing economies are expected to grow 3.8 per cent this year, down 1 percentage point from the previous forecast; It will grow 4.4 per cent next year, down 0.3 % points from its previous forecast.
The IMF warned that global growth forecasts were much more uncertain than in the past as the conflict between Russia and Ukraine hit the world economy hard. If western sanctions on Russia are not lifted and a wider crackdown on Russian energy exports continues after the conflict ends, global growth could slow further and inflation could be higher than expected.
IMF economic Adviser and research director Pierre-Olivier Gulanza said in a blog post on the same day that global economic growth is highly uncertain. In this predicament, policies at the national level and multilateral cooperation will play an important role. Central banks need to adjust policy decisively to ensure that inflation expectations remain stable over the medium to long term, and provide clear communication and forward guidance on the monetary policy outlook to minimise the disruptive risks of policy adjustments.
Post time: Apr-28-2022