The IMF has revised down the global growth forecast to 3.2% in 2022 from 3.6% in the earlier projection. The outlook for 2023 was also reduced to 2.9% from 3.6%. The downward revision was due the effects of higher interest rates made by many central banks in the world in containing price pressure. We are expecting the global economy to grow by 2.7% for 2022, and 3.0% for 2023.

Inflation projection for this year was also revised, where inflation among advanced economies was raised by 0.9 percentage point to 6.6%, and 0.8 percentage point to 9.5% among emerging economies.

According to the IMF, the main risk is the war in Ukraine where European gas imports from Russia could be abruptly stopped, which will worsen price pressure. Another risk is tighter global financial conditions as more central banks are expected to continue to tighten monetary policy, China’s zero-Covid policy measures and an escalating situation in the property sector, and geopolitical tensions.

Source: AmInvest Research - 27 Jul 2022