IMF lowers global growth forecast and warns of recession in 2023

First modification: 10/12/2022 – 03:56

The global economy will slow down more than expected in 2023, a year in which much of the world will face recession, according to the latest report from the International Monetary Fund, IMF, which lowered it by two tenths, to 2.7 %, your growth forecast for next year.

The IMF maintains its global growth forecast for 2022 at 3.2%, and warns that the risks that have already slowed down world economic developments will persist and may worsen it.

According to them, at least a third of the world economies will enter a technical recession next year, that is, they will have at least two consecutive quarters of contraction of their Gross Domestic Product, GDP.

He estimates a 25% chance that the situation will get worse and next year’s global growth will not even reach 2%. The International Monetary Fund stated that “risks to global financial stability have increased” amid historically high inflation, in releasing its recent Global Financial Stability Report.

The agency says that “the risks to global financial stability have increased, with a balance of risks biased to the downside. Amid the highest inflation in decades and extraordinary uncertainty, markets have been extremely volatile.”

Tobias Adrian, Financial Counselor and Director of Monetary and Capital Markets of the IMF, assured that “there is a risk of a disorderly tightening of financial conditions that may interact with pre-existing vulnerabilities. Investors could further reassess the outlook if inflationary pressures do not decline as rapidly as currently projected or if the economic slowdown intensifies.”

The main causes include Russia’s war against Ukraine, inflationary pressures, rising interest rates and the lingering consequences of the global pandemic.

“In short, the worst is yet to come, and for many people 2023 will feel like a recession,” said Pierre Olivier Gourinchas, director of research at the IMF.

With EFE and AP