The International Monetary Fund believes that the prospects for the global economy look gloomier than predicted. Among the main reasons they named the war in Ukraine, low growth in China, measures of central banks, high inflation and other, Reuters reported.
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Speaking about the deteriorating prospects for the global economy, the IMF relies on the constant deterioration in surveys of managers in recent months. The Fund notes that the dynamics are caused by several factors.
Recent surveys of managers, which measure manufacturing and service sector activity, signal weakness in most major G20 economies. Economic activity is declining and inflation keeps being high.
The IMF also noted that the current political environment is “unusually uncertain”.
The challenges facing the global economy are enormous, and the weakening economic performance points to further challenges ahead, the IMF stated.
Last month, the IMF lowered its global economic growth (GDP) forecast for 2023 from 2.9% to 2.7%.
The IMF believes that the deepening energy crisis in Europe will seriously damage economic growth and increase inflation. At the same time, prolonged high inflation may lead to a more significant than expected increase in interest rates and further tightening of the global financial environment. It also increases the risks of a debt crisis for vulnerable economies.
As for Ukraine, suffering from the Russian invasion, according to the results of October, consumer inflation in annual terms accelerated to 26.6% (from 24.6% in September).
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