AGL 5.60 Decreased By ▼ -0.18 (-3.11%)
ANL 8.90 Increased By ▲ 0.02 (0.23%)
AVN 76.85 Decreased By ▼ -2.07 (-2.62%)
BOP 5.26 Decreased By ▼ -0.02 (-0.38%)
CNERGY 4.63 Decreased By ▼ -0.07 (-1.49%)
EFERT 81.27 Decreased By ▼ -0.33 (-0.4%)
EPCL 50.08 Decreased By ▼ -0.83 (-1.63%)
FCCL 13.16 Decreased By ▼ -0.22 (-1.64%)
FFL 5.69 Decreased By ▼ -0.03 (-0.52%)
FLYNG 7.07 Decreased By ▼ -0.08 (-1.12%)
FNEL 4.79 Decreased By ▼ -0.03 (-0.62%)
GGGL 8.80 Decreased By ▼ -0.10 (-1.12%)
GGL 14.55 Decreased By ▼ -1.33 (-8.38%)
HUMNL 5.69 Decreased By ▼ -0.08 (-1.39%)
KEL 2.63 Decreased By ▼ -0.03 (-1.13%)
LOTCHEM 28.60 Decreased By ▼ -0.45 (-1.55%)
MLCF 24.49 Decreased By ▼ -0.61 (-2.43%)
OGDC 72.43 Decreased By ▼ -0.02 (-0.03%)
PAEL 15.36 Increased By ▲ 0.01 (0.07%)
PIBTL 5.00 Decreased By ▼ -0.05 (-0.99%)
PRL 16.10 Decreased By ▼ -0.19 (-1.17%)
SILK 1.08 Decreased By ▼ -0.01 (-0.92%)
TELE 9.14 Decreased By ▼ -0.23 (-2.45%)
TPL 7.23 Decreased By ▼ -0.10 (-1.36%)
TPLP 18.61 Decreased By ▼ -0.34 (-1.79%)
TREET 21.68 Decreased By ▼ -0.32 (-1.45%)
TRG 136.71 Decreased By ▼ -4.44 (-3.15%)
UNITY 16.88 Decreased By ▼ -0.14 (-0.82%)
WAVES 9.86 Decreased By ▼ -0.04 (-0.4%)
WTL 1.41 No Change ▼ 0.00 (0%)
BR100 4,225 Decreased By -29.6 (-0.7%)
BR30 15,518 Decreased By -214.7 (-1.36%)
KSE100 42,150 Decreased By -243.4 (-0.57%)
KSE30 15,588 Decreased By -75.7 (-0.48%)
Follow us

WASHINGTON: The global economic outlook has "darkened significantly" and could deteriorate further, the IMF's managing director said Wednesday, citing Russia's war in Ukraine and the rapid inflation it has caused, threatening widespread hunger and poverty.

The warning comes just months after the IMF already cut its global growth forecast for 2022 and 2023.

The Ukraine war hit as the world was struggling to recover from the ongoing impact of the Covid-19 pandemic, and has caused an acceleration of inflation that endangers the gains of the past two years.

The international crisis-lender is "projecting a further downgrade to global growth" in 2022 and 2023, Kristalina Georgieva said in a blog post published ahead of the meeting of G20 finance ministers and central bankers, scheduled for Friday and Saturday in Bali.

"It is going to be a tough 2022 -- and possibly an even tougher 2023, with increased risk of recession," she wrote.

The IMF is due to release its updated World Economic Outlook later this month, which Georgieva said will further downgrade the estimate for global growth from the April estimate of 3.6 percent.

"We warned this could get worse given potential downside risks. Since then, several of those risks have materialized -- and the multiple crises facing the world have intensified," she said.

IMF chief says ‘cannot rule out’ possible global recession

The outlook remains "extremely uncertain," and Georgieva warned that the poorest will be hit the hardest.

The risk of "social instability" was also increasing due to food and energy prices rising.

'Multilateral' cooperation

After a decade of low inflation, prices worldwide have surged amid strong demand for goods that outstripped supply as economies began to return to normal, but the Russian invasion of Ukraine in late February and the sanctions imposed on Moscow pushed fuel and food prices up sharply.

Ukraine and Russia are major grain producers, and Russia also is a key source of energy for Europe, and has throttled back natural gas supply to the region.

Inflation also has complicated policymaking: major central banks are raising interest rates to contain prices, but that increases borrowing costs for emerging markets and developing nations, which face high debt burdens.

But Georgieva said fighting the price surge is critical, despite the recession risk.

"Acting now will hurt less than acting later."

Offsetting the effects of the war and the pandemic are top priorities, which can only be addressed through "multilateral" financial aid and debt relief, she said.

"Reducing debt is an urgent necessity -- especially in emerging and developing economies with liabilities denominated in foreign exchange (FX) that are more vulnerable to tightening global financial conditions."

Georgieva stressed the top priorities were bringing down inflation, including through government spending cuts that would aid central bank efforts.

She called on the G20 to boost "coordinated international action," including wealthier countries providing essential aid to poorer ones.

Most of the world's economies are "completely shut out" from global markets due to financial pressures, and lack the safety net of a large domestic market, Georgieva warned.

"They are calling on the international community to come up with bold measures to support their people. This is a call we need to heed."

Comments

Comments are closed.

Global economic outlook has 'darkened significantly': IMF

‘Won’t take IMF’s dictation’: Dar

FY22 trade with US soars 38.3pc to $10.5bn YoY, NA told

US unveils high-tech B-21 stealth bomber

PM seeks reform plan: Power sector PDM govt’s Achilles heel

ECC decides to import urea; Rs8bn okayed for MPs’ schemes

Taxation-related issues of IT sector: FBR nominates IR Commissioners as focal persons

Maj-Gen Sharif made ISPR DG

SBP repays $1bn bond before due date

PM urges Chinese co to invest in renewable energy sector

Import of urea: PPRA refuses to give fresh exemption