Global economy faces worst outlook in 30 years amid rising geopolitical tensions and high inflation, IMF warns
- The IMF expects global output to grow at an average annual rate of 3% over the next five years
- This is the weakest forecast since 1990
- It is also well below the average annual growth rate of 3.8% over the past 20 years
According to the head of the International Monetary Fund, the global economy faces its bleakest outlook in more than 30 years as geopolitical tensions and skyrocketing inflation take their toll.
Speaking ahead of the fund’s spring meetings next week, Kristalina Georgieva said global production would grow at an average annual rate of just 3 percent over the next five years – the weakest forecast since 1990 and well below the average annual growth rate of 3.8 percent over the past two decades.
“With rising geopolitical tensions and still high inflation, a robust recovery remains elusive,” Georgieva said. “This hurts the prospects of everyone, especially the most vulnerable people and vulnerable countries.”
“With rising geopolitical tensions and still high inflation, a robust recovery remains elusive,” said International Monetary Fund head Kristalina Georgieva.
She said the global economy has “climbed one great hill after another over the past three years only to discover that many more will follow.”
“First was Covid, then the Russian invasion of Ukraine, inflation and a crisis in the cost of living that affected everyone,” she added.
“But the path ahead, and especially the path back to robust growth, is rough and foggy, and the ropes that hold us together may be weaker now than before.”
Bank failures in Switzerland and the US exposed vulnerabilities that increased downside risks to the global economy, she said.
The fund predicts that 90 percent of advanced economies will see slow growth this year.
On the war in Ukraine, Georgieva said, “It threatens to wipe out the peace dividend we have enjoyed over the past three decades, which also adds to the frictions in trade and finance.”