The International Monetary Fund warned on Tuesday of a slowdown in global economic growth as the world economy continues to take a hit from "increasingly gloomy developments in 2022."
The global economic outlook has darkened and the world may be on the verge of a recession.
The group warned that the risks to the outlook remain "overwhelmingly tilted to the downside."
The global economy has been hit by a number of shocks, including higher-than- expected inflation worldwide, a worse-than- anticipated slowdown in China, and more negative spillovers from Covid.
The International Monetary Fund said that high inflation is a major problem and that it should be the first priority for policymakers around the world.
The group now expects global inflation to hit 6.6% in advanced economies and 9.5% in developing economies this year, and is expecting prices to return to pre-pandemic levels by the end of the year.
The growth estimates for the U.S. economy have been slashed by the International Monetary Fund due to the impact of tighter monetary policy.
Pierre-Olivier Gourinchas said in a statement that the outlook has darkened. Two years after the last recession, the world may be on the verge of one.
The slowdown in China has global consequences according to the International Monetary Fund. The decline in domestic spending is affecting demand for goods and services from China's trade partners. China's economy is expected to grow 3.3% in 2022, down from previous estimates.
Last month, the World Bank slashed its forecasts for the global economy, predicting GDP growth of just 2.9% in 2022, down from an earlier estimate of 4.1%.
The International Monetary Fund sounded alarmed as the Ukraine war and inflation slam global economies.
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