by Karen Faulkner, Worthy News Correspondent
(Worthy News) -The International Monetary Fund (IMF) on Tuesday attested that the world is in danger of falling into another global recession, the Times of Israel (TOI) reports. The IMF gave its grim view in its latest World Economic Outlook (WEO), amid surging inflation and severe economic slowdowns in the US, the Euro zone, and China.
At a briefing Tuesday, IMF chief economist Pierre-Olivier Gourinchas said: “The outlook has darkened significantly since April. The world may soon be teetering on the edge of a global recession, only two years after the last one. The world’s three largest economies, the United States, China, and Europe are stalling with important consequences for the global outlook.”
The IMF cut its 2022 global GDP estimate to 3.2 percent, four-tenths of a point lower than the April forecast, TOI reports.
Economists have cited as a central concern the impact of the Russian invasion of Ukraine, with its attendant shortages in natural gas supplies to Europe, spiraling prices, and the prospect of famine in parts of the world that rely on Ukrainian grain, TOI reports. Moreover, continuing COVID-19 lockdowns have slowed economic activity in China, while the Federal Reserve’s aggressive interest rate increases are severely slowing US growth.
“Several shocks have hit a world economy already weakened by the pandemic,” including the war in Ukraine which has driven up global prices for food and energy, prompting central banks to raise interest rates sharply, the IMF said in its report.
Looking ahead, the IMF warned that “risks to the outlook are overwhelmingly tilted to the downside.”