16 October, 2022
The latest IMF World Economic Outlook report states that over a third of the global economy will contract this year or next, while the three largest economies such as the United States, the European Union, and China will continue to stall.
IMF forecasts project that global growth will remain unchanged this year at 3.2 percent and slow to 2.7 percent next year, 0.2 percentage points lower than the July forecast with a 25 percent probability that it could fall below 2 percent.
“In short, the worst is yet to come, and for many people 2023 will feel like a recession.”
Growth in the emerging market and developing economy group is expected to decline to 3.7 percent in 2022 and remain there in 2023, in contrast to the deepening slowdown in advanced economies.
Russia’s invasion of Ukraine continues to powerfully destabilise the global economy. Beyond the escalating and senseless destruction of lives and livelihoods, it has led to a severe energy crisis in Europe that is sharply increasing costs of living and hampering economic activity.
Gas prices in Europe have increased more than four-fold since 2021, with Russia cutting deliveries to less than 20 percent of their 2021 levels.
In addition disruption of the supply chain due to the c-19 pandemic also has resulted in low growth predictions.
Persistent and broadening inflation pressures have triggered a rapid and synchronised tightening of monetary conditions, alongside a powerful appreciation of the US dollar against most other currencies.