Washington, D.C. The International Monetary Fund has revised downward its estimates for world economic growth in 2023, estimating a $4 trillion reduction through 2026.
The Russian invasion of Ukraine, which started in February, has significantly altered the IMF’s stance on the economy, according to Kristalina Georgieva, managing director of the IMF, who said this to an audience on Thursday at Georgetown University.
Other concerns, such as food insecurity and the huge levels of debt held by low-income nations, are being exacerbated by the ongoing COVID-19 pandemic, rising inflation, and worsening climatic circumstances.
The IMF predicts that countries accounting for one-third of the global economy will see at least two consecutive quarters of economic decline this or next year, she said, adding that “the risks of recession are rising.”
Georgieva claimed that the organisation had already reduced its predictions for world economic growth three times. It now projects 3. 2% growth in 2022 and 2. 9% growth in 2023.
The gloomy predictions coincide with global central banks raising interest rates in an effort to rein in inflation. Though central banks from Asia to England started raising rates this week, the U.S. Federal Reserve has been the most aggressive in using them as a weapon to reduce inflation.
According to Georgieva, many economies could experience a protracted recession if monetary policy were tightened excessively and quickly across nations.
The invasion of Ukraine is already having a significant impact on the economies of many nations, and the IMF’s dire predictions are consistent with other predictions of slower development.
Last week, the Organization for Economic Cooperation and Development predicted a $2 loss for the world economy.
8 trillion in output due to the war in 2023.
The predictions come after the OPEC+ alliance of oil-exporting nations decided Wednesday to sharply cut production to support sagging oil prices. This decision could deal a further blow to the struggling global economy and increase politically sensitive pump prices for American drivers just before crucial national elections in November.
IMF issues a recession warning and a bleaker forecast for the world.
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