IMF cuts 2023 growth outlook amid colliding global shocks
The HinduThe International Monetary Fund on October 11 cut its global growth forecast for 2023 amid colliding pressures from the war in Ukraine, high energy and food prices, inflation and sharply higher interest rates, warning that conditions could worsen significantly next year. The IMF said global GDP growth next year will slow to 2.7%, compared to a 2.9% forecast in July, as higher interest rates slow the U.S. economy, Europe struggles with spiking gas prices and China contends with continued COVID-19 lockdowns and a weakening property sector. Priority: inflation The IMF said its outlook was subject to a delicate balancing act by central banks to fight inflation without over-tightening, which could push the global economy into an "unnecessarily severe recession" and cause disruptions to financial markets and pain for developing countries. A "plausible combination of shocks" including a 30% spike in oil prices from current levels could darken the outlook considerably, the IMF said, pushing global growth down to 1.0% next year — a level associated with widely falling real incomes.