In the first quarter of 2020, the whole world was in lockdown. Naturally, the economy of almost all countries contracted. The world is in recession.
The world economy has largely recovered since then, but analysts have warned that the footsteps of recession are once again being heard.
- The biggest concern is inflation. Central banks in developed countries have used the most ineffective means of combating inflation, that is, raising policy interest rates.
- But it is disrupting the life of the economy ie the demand itself. Wall Street almost teetered on the brink of a cliff after the US Federal Reserve raised interest rates late last week.
- With stagnation in the three largest economic regions and higher-than-expected inflation, the global economy will soon be on the brink of recession.
The International Monetary Fund (IMF) issued this warning on Tuesday.
The World Economic Outlook (WEO) forecast last April by the IMF has indicated that growth in 2022 and 2023 may be lower in their new forecasts.
Global production fell in the second quarter of this year due to problems in the US, China and the Eurozone, the company said. This is the first contraction since the start of the Covid-19 pandemic.
IMF economic adviser Pierre-Olivier Gourinchas said, “The picture has darkened significantly since April.” Just two years after the last recession, the world is on the brink of a recession soon.’
The Washington-based IMF said it now expects the global economy to grow by 3.2 percent in 2022 – down 0.4 points from April. The recession is predicted to continue next year. At that time the growth will be 2.9 percent.
The UK forecasts growth of 3.2 per cent in 2022 and 0.5 per cent in 2023. The IMF said growth in the UK will slow significantly in the second half of this year and will be the weakest of the G7 economies in 2023.🔱