The International Monetary Fund (IMF) on Tuesday projected the global economy to grow by 3.2 percent this year and 2.7 percent in 2023, with a downward 0.2-percentage-point revision for 2023 from the July forecast, according to the latest World Economic Outlook (WEO) report, Reuters reports.
The global economy is experiencing "a number of turbulent challenges," as inflation higher than seen in several decades, tightening financial conditions in most regions, the Russia-Ukraine conflict, and the lingering COVID-19 pandemic all weigh heavily on the outlook, the report said.
The report noted that this is the weakest growth profile since 2001 except for the global financial crisis and the acute phase of the COVID-19 pandemic and reflects significant slowdowns for the largest economies.
A contraction in real gross domestic product (GDP) lasting for at least two consecutive quarters (which some economists refer to as a "technical recession") is seen at some point during 2022-2023 in about 43 percent of economies, amounting to more than one-third of the world GDP, according to the report.
Global inflation is forecast to rise from 4.7 percent in 2021 to 8.8 percent in 2022 but to decline to 6.5 percent in 2023 and to 4.1 percent by 2024, the report showed.
Noting that risks to the outlook remain unusually large and to the downside, the latest WEO report said that monetary policy could miscalculate the right stance to reduce inflation, more energy and food price shocks might cause inflation to persist for longer, and global tightening in financing conditions could trigger widespread emerging market debt distress.
The IMF warned that geopolitical fragmentation could impede trade and capital flows, further hindering climate policy cooperation.
