The International Monetary Fund stated on Sunday that the global economic outlook is much more severe than expected last month. Noting a consistent deterioration in purchasing manager polls in recent months.
The tighter monetary policy brought on by consistently high and widespread inflation. China’s sluggish development momentum, and continuous supply disruptions with food insecurity brought on by Russia’s invasion of Ukraine were cited as the causes of the gloomier outlook.
The IMF state that new high-frequency indicators “suggest that the outlook is dark,” notably in Europe. In a blog post for a G20 conference being hel in Indonesia.
It claimed that most of the Group of 20’s major economies were showing signs of deterioration in recent purchasing manager indexes. Which measure manufacturing and services activity.
It was predict that economic activity would decline as inflation remain stubbornly high.
The IMF said that global dispersion added to “a nexus of downside risks” and.
That “readings for an increasing share of G20 nations have slipped from levels that suggest contraction earlier this year.“
The IMF added that the current political environment was “unusually unstable.” And that the challenges facing the world economy were “immense and weakening economic figures hint to greater challenges ahead.”
While a protracted period of high inflation would result in larger-than-expected policy interest rate increases as well as further tightness of macroeconomic environment, a growing energy crisis in Europe would have a significant negative impact on economy and raise prices.
The IMF then stated that this presented “growing risks of a sovereign debt crisis for vulnerable countries.”
Global growth would be harm by increasingly extreme weather events, it claim