Washington: The latest study from the International Monetary Fund claims that the global economy is facing a more dark and uncertain future while still reeling from the coronavirus outbreak and the Ukraine war (IMF).
The United States, China, and the major European countries are the three primary economic powerhouses of the globe, and their stagnation has huge ramifications, according to the World Economic Outlook Update July 2022: Gloomy and More Uncertain.
IMF Economic Counselor and Director of Research Pierre-Olivier Gourinchas stated that “the prognosis has markedly worsened since April.”
Only two years after the previous recession, the world may soon be on the verge of another one.
Global growth is expected to drop from 6.1% last year to 3.2% in 2022, which is 0.4% less than what was predicted in the most recent Outlook update in April.
Global financial conditions are tightening due to higher-than-expected inflation, particularly in the US and the main European economies.
The projection predicts that growth in the US will be 2.3% this year and 1% next year due to decreased consumer buying power and monetary tightening policy.
With COVID-19 outbreaks and lockdowns, China’s downturn has been worse than expected, and the negative repercussions of Russia’s invasion of Ukraine are still being felt.
Aside from the epidemic, more lockdowns and a worsening real estate crisis there have further slowed GDP this year, which is already at 3.3%, the lowest level in more than 40 years.
Additionally, growth in the Eurozone has been downgraded to 2.6% this year and 1.2 percent in 2023 due to the effects of the Ukraine War and stricter Monetary Policy.