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

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