downgrades global economy forecast amid storm clouds warning

IMF: Downgrades Global Economy Forecast Amid Storm Clouds Warning

The global economy continues to face major challenges such as Russia’s invasion of Ukraine, the cost of living crisis due to continued and mounting inflationary pressures, and a slowdown in China.

WASHINGTON: The International Monetary Fund has downgraded its 2023 global economic outlook, citing a long list of threats, including Russia’s war on Ukraine, chronic inflationary pressures, punitive interest rates, and lingering fallout from the global pandemic.

Persistent market vulnerabilities, tight liquidity, stubborn inflation, and continued efforts by global central banks to raise interest rates in response have combined to create a volatile and risky environment. the report said.

Credit bureaus forecast Tuesday that the global economy will grow by just 2.7% next year, down from the 2.9% forecast in July.

The IMF also warned that credit spreads in the corporate sector have widened significantly and higher interest rates could have a negative impact on the housing market.

International Monetary Fund (IMF)

The IMF was founded in 1944 after World War II and its primary purpose is to promote international monetary cooperation and financial stability. The IMF’s mission is to foster global economic recovery and growth while maintaining price stability and promoting conditions under which trade and finance flourish.

The IMF is a specialized agency of the United Nations system established at the Bretton Woods Conference in 1944. Its stated objectives are “to contribute to the maintenance of international peace and security; to facilitate adjustments in exchange rates between member countries and regions; to provide insurance against foreign currency risk; to help members achieve balanced and sustained growth, and to act as a cooperative partner in crisis prevention and management.”

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