IMF To Downgrade Global Growth Outlook For 2022, 2023

International Monetary Fund (IMF) Managing Director Kristalina Georgieva said on Thursday that the IMF will be downgrading the outlook for global growth for both 2022 and 2023, reported Reuters. She cited inflation, tightening of financial conditions and frequent Covid-19 lockdowns in China as weighing on activity.

Additional Takeaways:
• Since the IMF’s January global growth forecast for 2022 of 4.4%, the outlook has “deteriorated substantially”, largely due to the war in Ukraine.

• Net importers of food and fuel face growth downgrades, including in Africa, the Middle East, Asia and in Europe.

• Exporters of oil, gas and metals are to see higher growth prospects, but still face higher uncertainty.

• The Ukraine war will contribute to downgrades of 143 economies, accounting for 86% of global GDP.

• Higher energy and food prices are adding to inflation and are now a “clear and present danger” for many countries.

• The IMF projects that inflation is to remain elevated for longer than previously estimated.

• Food insecurity is a “grave concern” and, without action, will increase hunger, poverty and social unrest in fragile countries.

• The war on top of pandemic risks is eroding much of world’s recent progress in climbing back from the Covid-19 pandemic.

• Fragmentation of the world economy into geopolitical blocs threatens global prosperity and would incur painful adjustments, as well as hurt poor countries.

• Fragmentation of global governance is the most serious challenge to the post-World War Two economic order, and is impairing work on crises such as climate change.