Multiple crises gather, IMF is expected to further cut its global economic growth forecast this year

After the World Bank and the Organisation for Economic Co-operation and Development (OECD) downgraded their global economic outlook this week, an International Monetary Fund (IMF) spokesman said on Thursday (June 9) that the agency expects a further downward revision to 2022 next month. Annual global economic growth forecast.

If so, it would be the third time the IMF has downgraded its forecast this year. In April, the IMF cut its forecast for global economic growth in 2022 and 2023 by almost a percentage point to 3.6 percent.

IMF spokesman Gerry Rice (Gerry Rice) said at a regular briefing that the overall outlook for the global economy will continue to grow, although growth is slowing, but some countries may face recession.

"Obviously, there have been a lot of developments that could lead us to further downgrade our forecasts," Rice said. "A lot has happened since our last forecast, and it's happening very fast."

Rice said the forecast was revised lower this time because of the ongoing conflict between Russia and Ukraine, volatile commodity prices, very high food and energy prices, and rising interest rates in some advanced economies.

"We're seeing a conglomeration of crises...all of these things are moving in the same direction, and downside risks are becoming a reality," he said.

IMF Managing Director Georgieva warned last month that the global economy could face "the biggest test since World War II." She said the geopolitical conflict "destroys lives, drags down growth and drives up inflation" and urged countries not to "succumb to the forces of geoeconomic division that will make our world poorer and more dangerous".

The IMF will release its latest World Economic Outlook in mid-July.

Global growth outlook is heavily downgraded

Not only the IMF, but many international institutions are increasingly pessimistic about the outlook for the global economy.

The World Bank on Tuesday (June 7) cut its 2022 global growth forecast by nearly a third to 2.9%, citing mounting damage from the conflict in Russia and Ukraine and the COVID-19 pandemic, while warning of rising risks of stagflation.

A day later, the OECD cut its forecast for the global economy by 1.5 percentage points to 3 percent, though it said the global economy should avoid 1970s-style stagflation.

Late last month, the Institute of International Finance downgraded its forecast for global gross domestic product (GDP) growth this year to 2.3 percent from 4.6 percent. Among them, because the euro area is greatly affected by the conflict between Russia and Ukraine, the International Finance Institute's forecast for its economic growth this year has dropped from 3% to 1%. On the basis of the latest forecast, the Institute of International Finance believes that the risk of a global recession is rising.

Article source: Financial Associated Press