Thursday, August 4, 2022

IMF does not rule out global recession, then will reduce growth outlook

International Monetary Fund (IMF) President George Ava said on 6th that since April, the global economic outlook has been “significantly muted” and the possibility of a global recession next year cannot be ruled out, as risks rise Is.

In an exclusive interview with Reuters, George Ava said that the IMF will again revise its forecast for global economic growth in the next few weeks, the third time this year. Economists are finalizing the latest forecast.

The IMF is expected to release its latest forecast for global economic growth in 2022 and 2023 in late July. The IMF cut its 2022 global economic growth forecast to 3.6% in April, lower than the 4.4% forecast in the January WEO update.

“The global outlook has turned bleak since we updated our forecasts in April,” Georgieva said, citing a wider spread of inflation.Central bankan increase in the number of rapid interest rate hikes, slowing economic growth in mainland China, andRussiaExpand sanctions against Russia, etc.

“We are in trouble,” he said. Asked by reporters whether Georgieva could rule out a global recession, she replied: “The risk has increased, so it cannot be ruled out.”

Georgieva pointed to the latest economic data showing that some large economies, including China and Russia, contracted in the second quarter, emphasizing that the risks are even greater in 2023. “2022 is going to be tough, but maybe 2023 is going to be tough because there’s a higher risk of recession in 2023,” she said.

Investors increasingly worried about bearish risks, the U.S. TreasuryyieldThe curve “inverts” again on the 6th, with the 2-year yield exceeding the 10-year yield. US A reversal in Treasury yields is generally considered a reliable indicator of an impending recession.

Federal Reserve Chairman Jerome Powell said in June that the central bank was not planning a recession but was fully committed to keeping inflation down, even if doing so risks dragging the economy into recession.

Georgieva said a prolonged tightening of financial conditions would complicate the outlook for the global economy, stressing the importance of controlling rising prices.

He said the global outlook was now more divided than it was two years ago, with energy exporters, including the United States, performing more favourably, while energy importers struggled. Georgieva also said that, given the urgency to restore price stability, slowing economic growth “could be a price to be paid.”

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