IMF Downgrades Global Economy Forecasts: Going From Bad to Worse

The International Monetary Fund (IMF) released their new baseline forecast this morning, and it is quite a gloomy outlook. Noting the global economy is “reeling from the pandemic, and Russia’s invasion of Ukraine [the world] is facing an increasingly gloomy and uncertain outlook.” You can access the full report HERE

With this in mind, the IMF downgraded their growth forecast from 6.1 percent (which they made only in April) to 3.2 percent for the remainder of 2022 and down further to 2.9 percent in 2023.

Of note, they see China - facing further COVID lockdowns and a deepening and worrisome real estate crisis — seeing its growth pushed down to 3.3 percent this year. That is the slowest growth in China in four decades.

The Eurozone is facing particularly rough waters ahead, with growth now projected to slow to 2.6 percent for 2022 and 1.2 percent in 2023.

Added to this, the IMF assessment sees global inflation spiking to 6.6 percent for advanced economies and 9.5 percent in emerging and developing countries.

With rapidly growing food security issues in Africa and the Middle East caused by Moscow’s aggression, these assessments will likely change again. Our assessment is this, in turn, will bring new pressures on the EU and US to either accelerate military aid to Ukraine or begin to contemplate ways to find a negotiated solution - something we believe Moscow will not be particularly interested in pursuing unless they continue to suffer significant military losses. It is going to be a tough fall with many historic decisions facing leaders everywhere.