World is still reeling, says IMF projecting gloomy global growth at 3.2 pct this year, rising inflation

Pierre-Olivier Gourinchas, IMF’s Chief Economist

WASHINGTON, July 26 – The world is still reeling from the Covid-19 pandemic and the ongoing Russia-Ukraine war, International Monetary Fund said today, projecting a downwards 3.2 percent growth this year and 2.9 percent growth in 2023.

Briefing on the outlook here today, Pierre-Olivier Gourinchas, IMF’s Chief Economist said that inflation is expected to rise 6.6 percent in advanced economies and 9.5 percent in emerging and developing economies.

“The world’s three largest economies – the US, China, and Europe – are stalling. Many of the downside risks we identified in the April World Economic Outlook are now materializing. First, higher-than-expected and broader inflation, especially in the US and major European economies.

“This is triggering a major tightening of monetary and financial conditions. Second, a worse than anticipated slowdown in China, amid COVID-19 outbreaks and lockdowns. Third, further negative spillovers from the war in Ukraine and the associated sanctions and countersanctions,” said Pierre-Olivier Gourinchas.