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The International Monetary Fund (IMF) on Tuesday slashed global growth forecast for 2022 to 3.2%, down by 0.4 percentage point from April projection, according to its newly released update to the World Economic Outlook.
The slowdown is predicted to continue next year, when growth is now forecast to be 2.9% – 0.7 points lower than had been pencilled in three months ago, it said.
The IMF said problems in the US, China and the eurozone had resulted in global output falling in the second quarter of this year – the first contraction since the start of the Covid-19 pandemic.
“Higher-than-expected inflation, especially in the US and major European economies, is triggering a tightening of global financial conditions. China’s slowdown has been worse than anticipated amid Covid-19 outbreaks and lockdowns, and there have been further negative spillovers from the war in Ukraine.”
A breakdown of the revised WEO forecasts showed growth downgrades in 2022 of 0.8 points in the US, 0.9 points in Germany, and 1.1 points for China. In 2023, all the world’s major economies apart from Nigeria and Saudi Arabia – both oil exporting countries – are now expected to grow more slowly.