July 27, 2022

IMF publishes damning WEO report, slowing growth for 2023

4.8 min read

The International Monetary Fund (IMF) has today published its World Economic Outlook, examining the countries headed toward recession, and highlighting the issues with inflation, globally. In fact, the IMF has cut its forecasts for the next 18 months after warning that some of the world’s biggest economies (the US, China, and the eurozone) are all stalling while inflation is higher than expected.

The IMF is expecting the global economy to grow by just 3.2% in 2022, a 0.4 point reduction since the last WEO report in April 2022. This slowdown is expected to continue through 2023: the growth forecast is expected to sit at 2.9%, a 0.7 point reduction from April’s predictions. As a whole, the UK is expected to grow by 3.2% in 2022 and by just 0.5% in 2023, cuts of 0.5 and 0.7 points respectively. The UK is expected to be the weakest of the G7 economies in 2023.

Factors such as higher–than–expected inflation, continued lockdowns following further COVID-19 outbreaks, and fallout from the Ukranian/Russian war are all triggering a tightening of the economic situation. Inflation is expected to continue rising, and by the fourth quarter of 2022 global inflation is expected to be up to 8.3%; for the UK, that inflation rate is set to hit 10.5%.

Of the major industrial countries, only Japan and Canada are set to grow by over 1% in 2023. The US and France are predicted growth of 1%, and 0.8% and 0.7% for Germany and Italy respectively.  

Pierre-Olivier Gourinchas, the Economic Counsellor at the IMF, commented:  

“The global economy, still reeling from the pandemic and Russia’s invasion of Ukraine, is facing an increasingly gloomy and uncertain outlook”.

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