The International Monetary Fund (IMF) released its new forecast for the global economy on Tuesday. It is possible that the forecast will be revised downwards. Recently, IMF CEO Kristalina Georgieva said that the outlook had become “much more bleak” and could deteriorate further.

This was due to Russia’s invasion of Ukraine and the resulting high inflation, as well as the hunger and poverty that resulted, Georgieva wrote in a blog. “It’s going to be a tough 2022 and maybe a tougher 2023, with an increased risk of a recession.”

In its latest forecast for April, the IMF still assumed that the size of the world economy would grow by 3.6 percent this year and another 3.6 percent next year. It was already a sharp downward adjustment, as the picture looked much better before Russia’s invasion of Ukraine. “We warned at the time that there were necessary risks threatening growth and some of them have materialized.”

High inflation

Georgieva also recently pointed out that urgent action is needed to combat high inflation. Bulgaria warned at the G20 summit in Bali that the already “highly uncertain” global economic outlook could deteriorate if rising prices continue. There will also be a big risk of some kind of gas crisis in Europe. That conclusion was recently expressed in an IMF analysis of what a guest shortage means for Europe. If Russia turns off gas taps to Europe completely, Eastern Europe and Italy in particular will face a strong recession, according to the fund.

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