The Fund blamed the bleaker outlook on monetary policy tightening caused by persistently high and broad inflation, weak growth momentum in China, and persistent supply disruptions and food insecurity stemming from the Ukraine crisis.
The fund last month cut its global growth forecast for 2023 to 2.7 percent from a previous forecast of 2.9 percent.
In a blog prepared for the G20 leaders’ summit in Indonesia, the fund said the latest indicators “confirm that the outlook is more bleak”, particularly in Europe.
He added that recent indicators of purchasing managers that measure manufacturing and services activity show the weakness of most of the G20 economies, with economic activity expected to contract at a time when inflation remains high.
A worsening energy crisis in Europe would seriously hurt growth and raise inflation, while prolonged high inflation could lead to larger-than-expected increases in interest rate policy and further tighten global financial conditions.
This in turn poses “rising sovereign debt crisis risks to weak economies,” the IMF said.
He added that increasingly extreme weather events would also harm growth worldwide.
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