The International Monetary Fund on Tuesday reduced its outlook for global economic growth and warned that there are still challenges ahead, including high inflation, central bank tightening, the war in Ukraine and the lingering Covid-19 pandemic.
“As storm clouds gather, policymakers need to keep a steady hand,” the IMF said in its World Economic Outlook report.
The financial agency said the global economy is “experiencing a broad-based and sharper-than-expected slowdown, with inflation higher than seen in several decades.” Global growth is now projected to come in at 3.2% in 2022, down from 6.0% in 2021, while falling to 2.7% in 2023. The outlook is the weakest it’s been since 2001, the IMF said, except for during the global financial crisis and the initial phase of the pandemic.
“More than a third of the global economy will contract this year or next, while the three largest economies—the United States, the European Union, and China—will continue to stall,” the IMF said. “In short, the worst is yet to come, and for many people 2023 will feel like a recession.”