IMF Predicts Global Economic Slowdown Through 2023

In its October 2022 edition of the *World Economic Outlook* report, the International Monetary Fund (IMF) predicts a global economic downturn extending into next year.

"The global economy faces significant headwinds. Inflation is higher than it has been in several decades; there is financial tightening in many regions; the Russian invasion of Ukraine; and the lingering effects of the Covid-19 pandemic," stated the IMF.

"Global economic growth is projected to slow from 6% in 2021 to 3.2% in 2022 and 2.7% in 2023," the IMF predicted.

However, the projected global economic downturn is largely driven by the decline in the economies of advanced countries such as the United States and European nations.

"Economic growth in advanced economies is projected to slow from 5.2% in 2021 to 2.4% in 2022 and 1.1% in 2023. This projected slowdown is concentrated in the US and European economies," the IMF explained.

Meanwhile, the economic slowdown in developing countries is generally predicted to be less severe. Indeed, the ASEAN-5 economies (Indonesia, Malaysia, Philippines, Thailand, and Vietnam) are predicted to strengthen in 2022, as shown in the graph.

"Economic growth in emerging market and developing economies is projected to fall to 3.7% in 2022 and remain at the same level in 2023, in contrast to the deeper slowdown in advanced economies," the IMF further explained.

Amidst this volatile situation, the IMF believes countries need to adopt appropriate policies, such as in inflation control and social protection for vulnerable groups.

The IMF also encourages countries to strengthen international cooperation, including by easing export restrictions on commodities.

"When countries ban exports, they may find it difficult to buy other goods they may need from abroad. Export bans in one country often provoke retaliatory export bans from other countries, making everyone worse off," concluded the IMF.