IMF: Global Economy Heading Towards Worst Slowdown In 50 Years

Hamilton Nwosa
Writer
IMF: Global Economy Heading Towards Worst Slowdown In 50 Years

Ad

Controversy as Stanford University Denies Kemi Badenoch’s Scholarship Claim

By Abiola Olawale Kemi Badenoch, the leader of the United Kingdom's Conservative Party, is facing scrutiny over her claim of receiving a pre-med scholarship offer from Stanford University at age 16. This is as Jon Reider, the Stanford admissions officer at the time of Badenoch’s application, disputed the assertion. Badenoch, who was born in London…

2027: “Jonathan Is Legally Qualified to Contest for Presidency”, Brother Speaks Again

By Abiola Olawale Mr Azibaola Robert, an entrepreneur, lawyer and pro-democracy activist has spoken out again, maintaining that his cousin and former President of Nigeria, Goodluck Jonathan is constitutionally and legally qualified to contest for the presidency. Azibaola Robert, a frontline lawyer and former pro-democracy activist, in a press statement posted on his official Facebook…

Gov Sani warns El-Rufai over alleged ‘plot to destabilise Kaduna,’ vows decisive action

By Obinna Uballa The governor of Kaduna State, Uba Sani, has accused his predecessor, ex-Governor Nasir El-Rufai of instigating political unrest and attempting to drag the state into crisis, warning that any attempt to destabilise Kaduna will be met with decisive action. In a statement signed by the Commissioner for Internal Security and Home Affairs,…

Ad

  • The International Monetary Fund is warning that the global economy is on the brink of one of the sharpest slowdowns in recent history. 
  • A full shut-off of Russian gas flows to Europe and more upside inflation shocks would plunge growth into among the worst brackets since the 1970s.
  • The IMF has slashed economic growth projections since the beginning of the year.

The global economy could be hurtling toward one of the sharpest slowdowns in recent memory, the International Monetary Fund (IMF) warned today.

A full shut-off of Russian gas flows to Europe and more upside inflation shocks would plunge growth into among the worst brackets since the 1970s.

The global economic watchdog said if existing headwinds intensify, expansion will drop to 2.6 percent and two percent in 2023 respectively, “putting growth in the bottom 10 percent of outcomes since 1970”.

In the organization’s most likely scenario, expansion is healthier, but the IMF said the likelihood of its gloomy forecast materializing is much stronger than usual.

The IMF has slashed economic growth projections since the beginning of the year

The UK will squeeze out the weakest growth of any G7 nation next year, slumping to just 0.5 percent, meaning a recession in 2023 is almost certain.

Just at the beginning of 2022, Britain was forecast to post a similar expansion to Germany next year.

However, scorching inflation, driven by imbalances in the jobs market, higher energy prices, and ongoing Covid-19 trade disruption, has crippled the country’s economy.

The UK also has the highest inflation rate of any rich country, climbing to a 40-year high of 9.4 percent. It is expected to hit 12 percent in October, six times the Bank of England’s two percent target when another hike to energy bills lands.

That surge in living costs is eroding households’ living standards at the worst rate since records began, igniting fears the UK will tip into recession soon.

The Bank, and the world’s other top central banks, need to “stay the course until inflation is tamed,” Pierre-Olivier Gourinchas, the IMF’s chief economist, said.

“Tighter monetary policy will inevitably have real economic costs, but delay will only exacerbate them,” he added.

Governor Andrew Bailey and co are expected next Thursday to launch the biggest rate hike since the Bank was made independent 25 years ago.

They have already lifted rates five times in a row to a 13-year high of 1.25 percent.

NB: CityAM wrote this article for oilprice.com

Ad

X whatsapp