IMF To Cut Forecast For Global Growth Again
International Monetary Fund (IMF) expects a further cut of its forecast for global growth next month, the third downgrade this year.
The Fund’s Director of Communications, Gerry Rice said the decision follows moves by the World Bank and the Organisation for Economic Co-operation and Development (OECD) to cut their forecasts.
The expected cut would mark the IMF’s third downgrade this year.
In April, the IMF slashed its forecast for global growth by nearly a full percentage point to 3.6 per cent this and next year.
Rice explained that the outlook still called for growth across the globe, albeit at a slower level, but that some countries may be facing a recession.
“Several developments have taken place that could lead us to revise down further,” Rice told reporters. “So much has happened and (is) happening very quickly since we last came with our forecast,” he added.
The IMF is due to release an update to its World Economic Outlook in mid-July.
The World Bank on Tuesday slashed its global growth forecast by nearly a third to 2.9 per cent for the year, citing compounding damage from Russia’s invasion of Ukraine and the COVID-19 pandemic, while warning about the rising risk of stagflation.
A day later, the OECD cut its forecast by 1.5 percentage points to three although it said the global economy should avoid a bout of 1970s-style stagflation.
Rice said the expected downgrade was due to the continuing war in Ukraine, volatile commodity prices, very high food and energy prices, and a more severe than expected slowdown in the Chinese economy, as well as rising interest rates in several advanced economies. He gave no details on China’s outlook.
He added: “We’re seeing this confluence of crises … the combination of all of these things going in the same direction of downside risks materialising.”
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