IMF Warns of ‘Darkening’ Global Economy

The International Monetary Fund (IMF) warned that the global economy is currently facing a “darkening outlook.”

The IMF’s most recent forecast, made in April, projected that the global economy’s growth will only be 3.6 percent this year and the following. The financial institution also warned that global economic growth could get worse due to “potential downside risks.”

IMF’s Managing Director Kristalina Georgieva attributed the bleak state of the global economy to the COVID-19 pandemic, the “higher-than-expected” inflation, and the ongoing conflict between Russia and Ukraine.

“It is going to be a tough 2022—and possibly an even tougher 2023, with increased risk of recession,” wrote Georgieva.

The IMF’s report came as inflation in the US, the world’s largest economy, has risen to 9.1 percent which is the highest recorded level in more than 40 years.

Georgieva expressed that the skyrocketing inflation has “broadened beyond food and energy prices” while pandemic-related issues “renewed bottlenecks in global supply chains” which have disrupted economic activity.

According to the IMF, 75 central banks have already increased interest rates by an average of 3.8 times in the previous year.

Georgieva recommended that the world’s wealthiest nations should urgently assist those in need, including with fresh bilateral and multilateral funds, to prevent increased starvation, malnutrition, and migration.

“Large lenders—both sovereign and private—need to step up and play their part. Time is not on our side,” wrote Georgieva.

Georgieva’s warning comes as the G20 finance ministers and central bank governors get ready to meet in Bali for a summit.

© Fourth Estate® — All Rights Reserved.
This material may not be published, broadcast, rewritten or redistributed.