The Imf Downgrades Global Growth Forecast Citing Russia’s Invasion Of Ukraine

According to Al Jazeera, the International Monetary Fund (IMF) projected its latest World Economic Outlook at a growth of 3.3% in advanced economies and 3.8% in emerging market and developing economies in 2022. This represents a drop of 3.9% and 4.8% in its previous forecast respectively. It says that the global economic slowdown was largely caused by Russia’s aggression against Ukraine as well as the new bottlenecks in global supply chains related to the CCP’s lockdowns in response to the pandemic outbreak.

The IMF said the war would further exacerbate inflation, which was accelerating and has reached the highest point over the past decades in parts of the U.S. and Europe. This triggered the expectations that central banks would adopt tighter monetary policy more rapidly than anticipated.

IMF chief economist Pierre-Olivier Gourinchas said not only did this war add to the series of supply shocks that have struck the global economy in recent years, whose effects would propagate far and wide through commodity markets, trade and financial linkages. This also increased the risk of a more permanent fragmentation of the world into geopolitical blocks with distinct technology standards, cross-border payment systems and reserve currencies.