The International Monetary Fund (IMF) has warned of a gloomier global economic outlook due to multiple headwinds including Russia’s invasion of Ukraine, interest rate increases to contain inflation and lingering pandemic effects, such as China’s lockdowns and disruptions in supply chains.
The latest World Economic Outlook from the IMF released last month also lowered its global growth forecast for 2023 to 2.7% and Tryggvi Gudmundsson, an economist at the IMF, says the organisation expects countries accounting for more than one third of global output to contract during part of this year or next year.
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In addition, in its latest report prepared for the G20, the IMF says recent high-frequency indicators confirm that the outlook is gloomier, with a steady worsening in recent months for purchasing manager indices that are tracking a range of G20 economies.
“A growing share of G20 countries fell from expansionary territory earlier this year to levels that signal contraction. That is true for both advanced and emerging market economies, underscoring the slowdown’s global nature.”