Global economic prospects have been severely set back, largely because of Russia’s invasion of Ukraine. This crisis unfolds as the global economy has not yet fully recovered from the pandemic.Pierre-Olivier Gourinchas, the International Monetary Fund’s chief economist, at a news briefing following the world economic outlook report released on Tuesday.
- The International Monetary Fund (IMF): Established in 1944 in the aftermath of the Great Depression, the organization includes 190 member countries and seeks to promote financial stability and global economic growth, reduce poverty, and encourage international trade.
- Their April 2022 report provides an overview of what to expect from the global economy in 2022 and 2023. The report expects slowed economic growth — cutting its forecast for global growth to 3.6% this year, compared to 6.1% last year AND lower than the 4.4% growth it had predicted in January for 2022. The report also expects the world economy growth to grow by only 3.6% again next year, compared to the previous 3.8% forecast.
- IMF and World Bank leaders are meeting in Washington this week. One of their main goals is to establish policies that limit the impact the war in Ukraine might have on the global economy.
- Big picture: “The economic reverberations of this conflict will extend far beyond Ukraine’s borders. It is now clear that the double whammy of the pandemic and the war has disrupted supply chains, increased inflationary pressures, and lowered expectations for output and trade growth.” –Dr. Ngozi Okonjo-Iweala, director general of the World Trade Organization, who has announced that the organization expects global trade growth to decrease as well.
- Why It Matters: The World Economic Outlook report provides a general overview of the state of the economy and highlights key factors — such as the pandemic and the war in Ukraine. The numbers are subject to change, however, with this year’s report being marked by “unusually high uncertainty.”
Citing Russia’s war, IMF cuts global growth forecast to 3.6% (Associated Press)
by Jenna Lee,