The global economic outlook is even bleaker than projected last month, the International Monetary Fund said on Sunday, citing a steady worsening in surveys of purchasing managers in recent months.
He blamed the bleak outlook on monetary policy tightening triggered by persistently high and broad inflation, weak growth momentum in China and continued supply disruptions and food insecurity caused by Russia’s invasion of Ukraine.
the global creditor last month cut its global growth forecast for 2023 to 2.7%, from a previous forecast of 2.9%.
In a blog prepared for a summit of G20 leaders in Indonesia, the IMF said recent high-frequency indicators “confirm that the outlook is bleaker”, particularly in Europe.
He said recent purchasing managers’ indexes measuring manufacturing and services activity had signaled weakness in most of the top 20 economies in the Group of 20, with economic activity set to contract while inflation remained stubbornly high.
“Readings for a growing share of G20 countries have fallen from expansionary territory earlier this year to levels that signal contraction,” the IMF said, adding that global fragmentation added “a confluence of downside risks.”
“The challenges facing the global economy are immense and weakening economic indicators point to more challenges ahead,” the IMF said, adding that the current political environment is “extraordinarily uncertain”.
A worsening energy crisis in Europe would severely damage growth and increase inflation, while prolonged high inflation could lead to higher-than-expected interest rate hikes and a further tightening of global financial conditions.
That, in turn, posed “increasing risks of a sovereign debt crisis for vulnerable economies,” the IMF said.
Increasingly severe weather events would also hamper growth around the world, he said.
Source: CNN Brasil
I am Joe Jameson, author of World Stock Market. I have a fascination with the stock market and how it affects our world. I enjoy writing about my findings and hope to help others understand this complex system.