The International Monetary Fund said on Tuesday that the world economy is headed for "stormy waters" as it lowered its global growth projections for next year.
As the world's top economic officials traveled to Washington for the annual meetings of the World Bank and the I.M.F., a dark assessment was published in the World Economic Outlook report.
Over the last year, supply chain disruptions and Russia's war in Ukraine have led to surging food and energy prices, forcing central bankers to raise interest rates sharply to cool off their economies.
According to the report, the worst is yet to come, and many people will feel like a recession in three years.
According to the I.M.F., the global economy will grow by 3% this year but will slow to 2% in the years to come. At the beginning of the year, the I.M.F. projected that the global economy would grow at a faster rate in the next two years.
Daily business updates The latest coverage of business, markets and the economy, sent by email each weekday.It is expected that inflation will peak later this year and decline in the years to come.
Pierre-Olivier Gourinchas, the I.M.F.'s chief economist, said in an interview that the global economy was in a weakened state. The global economy is expected to be in a technical recession.
According to the I.M.F., a technical recession is an economy contracting for two quarters in a row.
The United States is likely to be in some kind of recession six to nine months from now, according to the chief executive of JP Morgan Chase.
The economies of the United States, the euro area and China are in different states of decline. In the United States, rising interest rates and inflation are taking a toll on consumer spending power. Europe is heavily reliant on Russia for energy and is facing steep increases in oil and gas prices as additional sanctions go into effect later this year. China's economy continues to be affected by the coronaviruses, which are being prevented from spreading in the country.
Many emerging markets were already fragile and faced high debt burdens as they climbed out of the pandemic, and now the slowdown in advanced economies is putting additional pressure on them. Millions of people are at risk of going into poverty due to higher interest rates, soaring food costs and diminished demand for exports.
The president of the World Bank said that the poor were hurt the most. We're in the middle of a crisis.
The Federal Reserve is facing calls to curtail interest rate increases as policymakers are under increasing pressure to blunt the effects of the pain in rich and poor countries.
The I.M.F warned against doing too little to fight inflation. Fiscal policies that will make inflation worse should not be enacted.
The I.M.F. acknowledged that it faces considerable uncertainty. Halting Russian gas supplies to Europe could hurt its economy, debt crises in developing countries could get worse, and the Pandemic could return. It is possible that global output will sink below 2 percent.
The report said that the risks to the outlook remained large.
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