In recent years, bright forecasts for the global economy have been something of a rarity. The last one is no exception. Top analysts feel pessimistic about the future of the world economy. Experts at the International Monetary Fund are sure that risks are heavily tilted to the downside.
The IMF revises its global economic growth forecasts with troubling regularity. The new batch of predictions has proved even gloomier than the previous one. Thus, the agency worsened its forecast for global economic growth in 2023 and 2024 to 2.8% and 3% from 2.9% and 3.1% respectively. Furthermore, experts warned of a "hard landing" for the global economy in case of persistently high inflation, prompting regulators to keep lifting interest rates. The outlook dimmed in the face of accelerating consumer prices as well as severe turmoil in the financial sector. According to the fund, price pressures persist despite a marked decline in the inflation rate amid interest rate hikes and easing prices for its main drivers - food and energy.
Signs of resilience, along with lower global energy and food prices, cover up the grim reality, IMF chief economist Pierre-Olivier Gourinchas said in an interview with the Financial Times. "More worrisome is that the sharp policy tightening of the past 12 months is starting to have serious side effects for the financial sector, " the IMF noted in a report.
Among potential risks, the agency highlighted a deepening energy crisis in Europe and acute food insecurity in low-income countries.
