IMF Cuts 2023 Global Growth Forecasts Further
The International Monetary Fund (IMF) on Tuesday cut its 2023 global growth forecasts further with a warning that countries representing a third of world output could be in recession next year.
However, the global lender maintained its 2022 growth forecast at 3.2 percent despite colliding pressures from rapid inflation, war-driven energy and food crises and higher interest rates which it noted were pushing the world to the brink of recession and threatening financial market stability.
In its gloomy World Economic Outlook published yesterday at the ongoing spring meeting, the Washington based global lender warned that, “The three largest economies, the United States, China and the euro zone, will continue to stall.”
In a statement, IMF’s chief economist, Pierre-Olivier Gourinchas, said “In short, the worst is yet to come, and for many people, 2023 will feel like a recession.”
The IMF said Global GDP growth next year will slow to 2.7 percent, down from its July forecast of 2.9 percent, as higher interest rates slow the U.S. economy, Europe struggles with spiking gas prices and China contends with continued COVID-19 lockdowns and a weakening property sector.
According to the report, retaining 3.2 percentage growth forecast reflected stronger-than-expected output in Europe but a weaker performance in the United States, after torrid 6 percent global growth last year as the COVID-19 pandemic eased.
Some key European economies will fall into “technical recession” next year, including Germany and Italy, as energy price spikes and shortages hit output. China’s growth outlooks also were downgraded as it struggles with continued COVID-19 lockdowns and a weakening property sector, where a deeper downturn would slow growth further, the IMF said.
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