The International Monetary Fund warns of a "darkening" global economic outlook

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The International Monetary Fund warns of a "darkening" global economic outlook
14 Jul 2022
6 min read

News Synopsis

The International Monetary Fund's chief has stated that the organization's forecast for global economic growth will be reduced this month. Its most recent forecast, released in April, predicted 3.6 percent growth this year and next. Kristalina Georgieva blamed the conflict in Ukraine, higher-than-expected inflation, and the ongoing Covid pandemic.

According to her, these are exacerbating the cost-of-living crisis for millions of people. She went on to say that the poorest people are suffering the most. It comes as inflation in the United States, the world's largest economy, reached 9.1 percent, the highest level in more than 40 years.

Her warning that the global economic outlook has "seriously deteriorated" comes as G20 finance ministers and central bank governors prepare to meet in Bali. Their agenda is chock-full of global economic concerns, such as rising commodity prices, food security, and the impact of the war in Ukraine, which is a major food exporter.

"We hope for the best, but we must prepare for the worst," says Indonesia's central bank governor Perry Warjiyo of the prospect of reaching an agreement on the way forward.

Ms. Georgieva stated in a blog post that inflation has "broken beyond food and energy prices," prompting many central banks to raise borrowing costs, which she stated will "need to continue."

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