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Global economic growth is slowing and prospects for a quick recovery are bleak, the International Monetary Fund said on Tuesday.
The IMF said it expects growth to slow from 6.1% last year across the globe to 3.2% this year, down 0.4 percent from its April forecast.
“A volatile recovery in 2021 has been followed by increasingly gloomy developments in 2022 as risks began to materialize,” the IMF said. “Global output shrank in the second quarter of this year, due to economic downturns in China and Russia, while US consumer spending was less than expected.”
The Washington-based international finance agency said “several shocks have rattled the world economy already weakened by the pandemic: higher-than-expected inflation around the world – especially in the United States and major European economies – causing more difficult conditions financial; a higher-than-anticipated slowdown in China, and further negative fallout from Russia’s war in Ukraine.”
The IMF said the price of consumer goods, especially food and energy, is rising around the world. The cost is expected to increase by 6.6% in advanced economies this year and by 9.5% in emerging and fast-growing markets.
The IMF said the war in Ukraine “could lead to a sudden halt” in Russian exports of natural gas to European countries and that “inflation may be harder to bring down than expected” if employers cannot find enough workers to meet their labor demands or if inflation rises at a faster rate than expected.
The IMF said a “possible alternative scenario” to its already lowered forecast would be a world economy “in which risks materialize, inflation rises further and global growth falls” to around 2.6% and 2% percent. in 2022 and 2023, respectively.
“With rising prices continuing to lower living standards around the world, taming inflation should be the first priority for policymakers,” the IMF said./VOA
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