IMF cuts global growth forecasts, warns high inflation threatens recession

Tags: Economy/Finance

The International Monetary Fund (IMF) cut global growth forecasts again on July 26.

Important facts

• The IMF warned that high inflation and Ukraine's war could lead to a downward spiral in economic growth and the world economy could be on the verge of recession if left unchecked.

• The IMF said that global real GDP growth will slow to 3.2% in 2022 from a forecast of 3.6% issued in April.

• The report said the world's GDP actually shrank in the second quarter due to slowdowns in China and Russia.

• The IMF cut its 2023 growth forecast to 2.9% from the April estimate of 3.6%, citing the impact of tighter monetary policy.

• Global growth has fallen below 2% only five times since 1970.

• In 1973, 1981 and 1982, 2009 and 2020, global growth fell below 2% due to the COVID-19 pandemic and caused a recession.

• India's growth forecast for the financial year 2023-24 has also been lowered by 0.8 percentage points to 6.1% due to rising economic risks.

India’s growth forecast by other institutions

• Reserve Bank of India's (RBI) estimation of India’s growth in 2022-23 - 7.2%

• Asian Development Bank's India's Growth Forecast for 2022-23 - 7.2%

About International Monetary Fund (IMF) 

• The International Monetary Fund (IMF), a United Nations (UN) specialised agency, was established in 1944 at the Bretton Woods Conference to secure international monetary policies.

• The International Monetary Fund is an organisation with 189 member countries.

• First Deputy Managing Director- Geeta Gopinath

• Headquarters- Washington, D.C., U.S.

• Managing Director- Kristalina Georgieva

• Chief Economist - Pierre Olivier Gourinchas