In a report released on October 11th, the International Monetary Fund (IMF) warned of conditions likely to worsen in the coming year, anticipating that more than a third of the world’s economies would contract.
World economic growth forecasts have been further cut by the IMF. This is due to inflation, the war in Ukraine, high energy and food prices, food crises, and higher interest rates driving the world into recession.
Pierre-Olivier Gourinchas, the Chief Economist at the International Monetary Fund stated: “The three largest world economies, the United States, China and the euro area, will continue to stall… In short, the worst is yet to come, and for many people, 2023 will feel like a recession. “
In its latest World Economic Outlook, the IMF forecasts global GDP growth of 2.7 percent next year, down from 2.9 percent in July and 3.8 percent in January. According to the International Monetary Fund, there is a 25% chance that growth will slow to less than 2%.
As higher interest rates slow the United States economy, Europe struggles with spiking gas prices, and China contends with a continued COVID-19 lockdown and a weakening property sector.
The Fund maintains its 2022 growth forecast of 3.2 percent, reflecting stronger-than-expected output in Europe but a weaker performance in the US, following a blistering 6.0 percent global growth in 2021.
The report says the weakest growth profile since 2001, except for the global financial crisis and the acute phase of the COVID-19 pandemic.