IMF expects further cut in global growth outlook

WASHINGTON — The International Monetary Fund expects to further cut its forecast for global economic growth in 2022 next month, an IMF spokesperson said on Thursday, following moves by the World Bank and Organization for Economic Co-operation and Development (OECD) to cut their own forecasts this week.

That would mark the IMF’s third downgrade this year. In April, the IMF had already slashed its forecast for global economic growth by nearly a full percentage point to 3.6% in 2022 and 2023.

Fund spokesperson Gerry Rice told a regular IMF briefing that the overall outlook still called for growth across the globe, albeit at a slower level, but that some countries may be facing a recession.

“Clearly a number of developments have taken place that could lead us to revise down further,” Rice told reporters. “So much has happened and (is) happening very quickly since we last came with our forecast.”

The IMF is due to release an update to its World Economic Outlook in mid-July.

The World Bank on Tuesday slashed its global growth forecast by nearly a third to 2.9% for 2022, citing compounding damage from Russia’s invasion of Ukraine and the COVID-19 pandemic, while warning about the rising risk of stagflation.

A day later, the OECD cut its forecast by 1.5 percentage points to 3%, although it said the global economy should avoid a bout of 1970s-style stagflation.

Rice said the expected downgrade was due to the continuing war in Ukraine, volatile commodity prices, very high food and energy prices, and a more severe than expected slowdown in the Chinese economy, as well as rising interest rates in a number of advanced economies. He gave no details on China’s outlook.

“We’re seeing this confluence of crises … the combination of all of these things going in the same direction of downside risks materializing,” he said. (Reporting by Andrea Shalal and Jorgelina do Rosario; Editing by Bill Berkrot)