IMF expects growth to slow to 3.2% in 2022
The International Monetary Fund (IMF) has revised down its benchmark forecast, saying growth is expected to slow from 6.1% last year to 3.2% in 2022.
The projection, which was published Tuesday in its World Economic Outlook (WEO) for July 2022, points to a decline of 0.4 percentage points from that of April 2022.
Describing the outlook as "gloomy and more uncertain", the IMF added that a tentative recovery in 2021 was followed by increasingly gloomy developments in 2022 as risks began to materialize.
He noted that global production contracted in the second quarter of this year, due to slowdowns in China and Russia, while US consumer spending came in below expectations.
“Several shocks hit a global economy already weakened by the pandemic: higher-than-expected inflation around the world – particularly in the United States and major European economies – resulting in tighter financial conditions; a worse than expected slowdown in China, reflecting COVID-19 outbreaks and lockdowns; and other negative fallout from the war in Ukraine.
“The baseline forecast calls for slower growth from 6.1% last year to 3.2% in 2022, 0.4 percentage points lower than in the Economic Outlook of April 2022,” the IMF said.
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The Fund explained that weaker growth earlier this year, a reduction in household purchasing power and a tightening of monetary policy led to a 1.4 percentage point downward revision to the States -United.
In China, he noted that further lockdowns and a worsening housing crisis led to a downward revision to growth of 1.1 percentage points, with major global spillovers, and in Europe, significant downward revisions reflect fallout from the war in Ukraine and monetary tightening. politics.
“Global inflation has been revised upwards due to higher food and energy prices as well as persistent supply and demand imbalances and is expected to reach 6.6% in advanced economies and 9.5% in emerging and developing economies this year - upward revisions of 0.9 and 0.8 percentage points, respectively.
“In 2023, disinflationary monetary policy is expected to weigh, with global output increasing by just 2.9%. The risks to the outlook are extremely on the downside,” the IMF added.
He observed that “the war in Ukraine could lead to a sudden halt in European gas imports from Russia; inflation could be harder to bring down than expected, either if labor markets are tighter than expected or if inflation expectations are not anchored; tighter global financial conditions could lead to over-indebtedness in emerging and developing countries; further COVID-19 outbreaks and shutdowns, as well as a further escalation of the housing sector crisis, could further dampen Chinese growth; and geopolitical fragmentation could hamper global trade and cooperation.
“A plausible alternative scenario in which risks materialize, inflation increases further and global growth drops to around 2.6% and 2.0% in 2022 and 2023, respectively, would place growth in the mid-10s lower results since 1970."
As rising prices continue to weigh on living standards around the world, the IMF has indicated that controlling inflation should be the top priority for policymakers.
According to the IMF, a tightening of monetary policy will inevitably have real economic costs, but the delay will only exacerbate them.
"Targeted fiscal support can help cushion the impact on the most vulnerable, but with government budgets strained by the pandemic and the need for disinflationary global macroeconomic policy, these policies will need to be offset by higher taxes. or a reduction in public spending. .
“Tighter monetary conditions will also affect financial stability, requiring judicious use of macroprudential tools and making reforms to debt resolution frameworks all the more necessary,” the IMF noted.
Furthermore, he advised that policies to address specific impacts on energy and food prices should focus on those most affected without distorting prices, and as the pandemic continues, vaccination rates need to increase to guard against future variants.
The IMF has asserted that mitigating climate change continues to require urgent multilateral action to limit emissions and increase investment to accelerate the green transition.
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IMF expects growth to slow to 3.2% in 2022
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IMF expects growth to slow to 3.2% in 2022
...
The International Monetary Fund (IMF) has revised down its benchmark forecast, saying growth is expected to slow from 6.1% last year to 3.2% in 2022.
The projection, which was published Tuesday in its World Economic Outlook (WEO) for July 2022, points to a decline of 0.4 percentage points from that of April 2022.
Describing the outlook as "gloomy and more uncertain", the IMF added that a tentative recovery in 2021 was followed by increasingly gloomy developments in 2022 as risks began to materialize.
He noted that global production contracted in the second quarter of this year, due to slowdowns in China and Russia, while US consumer spending came in below expectations.
“Several shocks hit a global economy already weakened by the pandemic: higher-than-expected inflation around the world – particularly in the United States and major European economies – resulting in tighter financial conditions; a worse than expected slowdown in China, reflecting COVID-19 outbreaks and lockdowns; and other negative fallout from the war in Ukraine.
“The baseline forecast calls for slower growth from 6.1% last year to 3.2% in 2022, 0.4 percentage points lower than in the Economic Outlook of April 2022,” the IMF said.
ALSO READ IN THE NIGERIAN TRIBUNE
The Fund explained that weaker growth earlier this year, a reduction in household purchasing power and a tightening of monetary policy led to a 1.4 percentage point downward revision to the States -United.
In China, he noted that further lockdowns and a worsening housing crisis led to a downward revision to growth of 1.1 percentage points, with major global spillovers, and in Europe, significant downward revisions reflect fallout from the war in Ukraine and monetary tightening. politics.
“Global inflation has been revised upwards due to higher food and energy prices as well as persistent supply and demand imbalances and is expected to reach 6.6% in advanced economies and 9.5% in emerging and developing economies this year - upward revisions of 0.9 and 0.8 percentage points, respectively.
“In 2023, disinflationary monetary policy is expected to weigh, with global output increasing by just 2.9%. The risks to the outlook are extremely on the downside,” the IMF added.
He observed that “the war in Ukraine could lead to a sudden halt in European gas imports from Russia; inflation could be harder to bring down than expected, either if labor markets are tighter than expected or if inflation expectations are not anchored; tighter global financial conditions could lead to over-indebtedness in emerging and developing countries; further COVID-19 outbreaks and shutdowns, as well as a further escalation of the housing sector crisis, could further dampen Chinese growth; and geopolitical fragmentation could hamper global trade and cooperation.
“A plausible alternative scenario in which risks materialize, inflation increases further and global growth drops to around 2.6% and 2.0% in 2022 and 2023, respectively, would place growth in the mid-10s lower results since 1970."
As rising prices continue to weigh on living standards around the world, the IMF has indicated that controlling inflation should be the top priority for policymakers.
According to the IMF, a tightening of monetary policy will inevitably have real economic costs, but the delay will only exacerbate them.
"Targeted fiscal support can help cushion the impact on the most vulnerable, but with government budgets strained by the pandemic and the need for disinflationary global macroeconomic policy, these policies will need to be offset by higher taxes. or a reduction in public spending. .
“Tighter monetary conditions will also affect financial stability, requiring judicious use of macroprudential tools and making reforms to debt resolution frameworks all the more necessary,” the IMF noted.
Furthermore, he advised that policies to address specific impacts on energy and food prices should focus on those most affected without distorting prices, and as the pandemic continues, vaccination rates need to increase to guard against future variants.
The IMF has asserted that mitigating climate change continues to require urgent multilateral action to limit emissions and increase investment to accelerate the green transition.
Osun's husband killer commits suicide
IMF expects growth to slow to 3.2% in 2022
Essential documents you need to apply to study abroad on a scholarship
IMF expects growth to slow to 3.2% in 2022
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