The International Monetary Fund (IMF) lowered its previous forecast for 2.9% global growth in 2023 to 2.7% at the 2022 Annual Meetings of the International Monetary Fund and the World Bank Group, which took place from Monday, October 10, to Sunday, October 16, in Washington, D.C.
Kristalina Georgieva, the Managing Director of the IMF, initially made this announcement in a speech at Georgetown University. In the speech, she said the outlook for the global economy was "darkening" as a result of the aftermath of the COVID-19 pandemic, the Russia-Ukraine conflict, and climate disasters across continents, predicting that it could get even worse.
She explained that the shock of these events has caused incalculable pain in people's lives, resulting in a global surge in prices, particularly for food and energy, and a cost of living crisis.
Georgieva said the global economy is experiencing a fundamental shift from the old order, which is characterized by an adherence to a global rules-based framework, low inflation, and low interest rates, to one which is more fragile with greater uncertainty in which any country, irrespective of its standing, can be thrown off-course easily.
The IMF head also said the world's largest economies are slowing down (with Europe being impacted severely by the reduction in gas supply from Russia due to the war; China by the pandemic; and the United States by inflation), which affects emerging and developing countries as demand for their exports decreases.
This downward revision of forecasted global growth, which was part of the IMF’s World Economic Outlook, October 2022, is the UN agency’s fourth downward revision this year.
In her speech, Georgieva also highlighted the growing risks of recession, predicting that either this year or the following year, the economies of countries accounting for a third of the global economy will contract for at least two consecutive quarters.
In terms of global division, she stated that the world cannot be divided into sections or take sides, especially in the Russia-Ukraine conflict. She pointed out that the majority of the effects of a divided world would fall on poor people, both in wealthy and poorer nations.
She also urged greater support for emerging markets and developing countries, noting that a stronger dollar, higher borrowing costs, and capital outflows can affect their growth.