The ‘gloomy’ global economic outlook reinforces the International Monetary Fund’s (IMF) forecast that the world will experience a recession as early as next year.
It is indirectly in line with the expectations of some analysts who state the world is entering a phase of recession in 2023.
It is understood IMF Managing Director Kristalina Georgieva is expected to lower her global economic growth projections for 2022 and 2023, which are currently at 3.6%, over the next few weeks.
The final results of the projection are expected to be published at the end of July.
As a scan, last April the IMF reduced its global economic growth forecast to around 1% following the effects of inflationary pressures, rising interest rates, China's economic slowdown as well as sanctions on Russia.
Comment Georgieva, the current situation forces the IMF not to rule out the possibility that the recession will arrive as early as 2023.
He added that the rest of 2022 is full of challenges but 2023 will be more difficult with the recession expected to peak.
The basis was made based on contractionary readings of 2nd quarter economic data on most global economies including China and Russia.
In addition, a significant portion of the US Treasury yield curve that was inverted for 2 consecutive days further strengthened expectations of a recession.
Meanwhile, Georgieva also stressed that the prolonged tightening of monetary policy would affect the outlook for the global economy but it was an important step in controlling prices.
As a result, he advised countries to carefully calibrate such actions to avoid any opportunities for fiscal support that could jeopardize the central bank's efforts to control inflation.
