IMF Economic Outlook Update:
- IMF lowers global growth projections in light of Ukraine war and inflation
- Global growth lowered to 3.6% from 4.4% in January projections
- Inflation expected to average 5.7% (adv economies) and 8.7% in emerging markets
The World Economic Outlook published from the IMF gives an overview as well as more detailed analysis of the world economy; considering issues affecting industrial countries, developing countries, and economies in transition to market; and address topics of pressing current interest.
Main Highlights from the report
- The US is expected to reach 3.7% growth in 2022, down from 4% in January
- IMF forecasts GDP growth in China of 4.4% in 2022 and 5.1% in 2023, down 0.4 and 0.1 percentage points from the January forecast respectively.
- IMF lowers UK growth forecast to 3.7% in 2022 and 1.2% in 2023, down from 4.7% and 2.3% in January forecast.
- IMF forecasts show that the UK faces the weakest growth and highest inflation of any G7 economy in 2023
Conflict in Ukraine Lowers IMF Growth Forecasts Across the Board
The IMF cited the war in Ukraine as “economic damage from the conflict will contribute to a significant slowdown in global growth in 2022 and to add to inflation.”
Projected global growth has been revised lower from an estimated figure of 4.4% in 2022 to 3.6% and is 0.2% lower for 2023 than the January forecast of 3.8%.
IMF Global and Emerging Growth Forecasts
Source: IMF
Economic Growth Projections for Main Regions
Source: IMF
Inflation
Additionally, the IMF revised its 2022 inflation projections to 5.7% for advance economies and 8.7% for emerging markets. The figures are 1.8% and 2.8% higher than January’s projections with the catalyst for inflation being the war-induced commodity price increases.
— Written by Richard Snow for DailyFX.com
Contact and follow Richard on Twitter: @RichardSnowFX
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