IMF: Global Economic Growth Projection Cut to 3.2% in 2022

The global economy is facing increasingly bleak and uncertain prospects. This has led the International Monetary Fund (IMF) to once again cut its projection for global economic growth in 2022.

In its July 2022 World Economic Outlook report, the global economy is forecast to grow by only 3.2% (year-on-year/yoy) this year, 0.4% lower than the April 2022 estimate.

This year's projected global economic growth is almost half of last year's 6.1% (yoy) growth. The IMF not only cut its projection for global economic growth in 2022 but also reduced its forecast for 2023 by 0.7 percentage points, to 2.9% (yoy).

The same trend is observed in advanced economies, which are projected to slow from 5.2% growth in 2021 to 2.5% in 2022, further decelerating to 1.4% next year.

Meanwhile, emerging market and developing economies are projected to grow by 3.6% in 2022, a slowdown from last year's 6.8% growth. Next year, their economic growth is forecast to improve to 3.9%.

The IMF assesses that the post-COVID-19 global economic recovery is tentative. Risks are mounting, leading to increasingly gloomy economic developments.

"The tentative recovery in 2021 has been followed by increasingly bleak developments in 2022," the IMF wrote in its report.

Higher-than-expected inflation worldwide, particularly in the United States and major European economies, is triggering tighter financial conditions.

Furthermore, there is an economic slowdown in China due to a resurgence of COVID-19 cases, leading the government to re-impose temporary lockdowns.

In addition, the war between Russia and Ukraine has driven up global food and energy prices. This has also prompted central banks worldwide to sharply raise interest rates.