MNI: IMF Chops Global Growth Forecast 0.8pp To 3.6% On War
Fund also sees prolonged inflation and risks of further shortages.
The IMF reduced the 2023 global growth estimate 0.2pp to 3.6% from its prior World Economic Outlook projection from January, and said medium-term growth beyond that has been lowered to 3.3%. Global output grew 6.1% last year.
"Overall economic risks have risen sharply, and policy tradeoffs have become even more challenging," including from slow progress distributing Covid vaccines and potential escalation of the war that's already displaced 5 million people, IMF research director Pierre-Olivier Gourinchas wrote.
The IMF raised its 2022 inflation forecasts by 1.8pp to 5.7% in advanced economies and by 2.8pp to 8.7% in emerging market and developing economies.
"The risk is rising that inflation expectations drift away from central bank inflation targets, prompting a more aggressive tightening response from policymakers," the IMF said. "Increases in food and fuel prices may also significantly increase the prospect of social unrest in poorer countries."
