Saudi Arabia ranked first globally in empowering women in AI    Saudi, Iraqi defense ministers discuss regional situation in phone call    Jeddah airport serves over 5.3 million passengers during 5-week peak Umrah season    Woman becomes first in UK to give birth after womb transplant    IMF Chief lauds Saudi Arabia for its prudent leadership of IMFC    Saudi stocks extend rally as TASI hits 11,500 points    Supreme Court pauses midnight deadline to return man mistakenly deported to El Salvador    Beijing vows to 'fight to the end' as Trump threatens 50% more tariffs    US in direct nuclear talks with Iran, Trump says    Six cases of child malnutrition found in Samos migrant camp, medical charity says    Women make up 20% of e-sports players in Saudi Arabia    KSrelief signs agreement to care for orphans in earthquake-affected areas of Syria    First baby born in UK to woman with transplanted womb    Pakistani star's Bollywood return excites fans and riles far right    Saudi Arabia highlights long standing relationship with UNESCO during Executive Board meeting    Ithra to showcase its art collection at Riyadh Art Week    6.8 million people travel via four Saudi airports during 2025 Umrah season    The Seven Dogs wraps filming in Riyadh with a budget exceeding $40 million    Saudi U-17s qualify for 2025 FIFA World Cup after win over Thailand    Al Qadsiah and Al Ettifaq share spoils in tense Eastern Derby stalemate    Benzema rescues Al Ittihad with stoppage-time equalizer in thrilling Jeddah Derby    Veteran Bollywood actor Manoj Kumar dies at 87    Bollywood actress vindicated over boyfriend's death after media hounding    Grand Mufti rules against posting prayers and preaching in mosques on social media    Exotic Taif Roses Simulation Performed at Taif Rose Festival    Asian shares mixed Tuesday    Weather Forecast for Tuesday    Saudi Tourism Authority Participates in Arabian Travel Market Exhibition in Dubai    Minister of Industry Announces 50 Investment Opportunities Worth over SAR 96 Billion in Machinery, Equipment Sector    HRH Crown Prince Offers Condolences to Crown Prince of Kuwait on Death of Sheikh Fawaz Salman Abdullah Al-Ali Al-Malek Al-Sabah    HRH Crown Prince Congratulates Santiago Peña on Winning Presidential Election in Paraguay    SDAIA Launches 1st Phase of 'Elevate Program' to Train 1,000 Women on Data, AI    41 Saudi Citizens and 171 Others from Brotherly and Friendly Countries Arrive in Saudi Arabia from Sudan    Saudi Arabia Hosts 1st Meeting of Arab Authorities Controlling Medicines    General Directorate of Narcotics Control Foils Attempt to Smuggle over 5 Million Amphetamine Pills    NAVI Javelins Crowned as Champions of Women's Counter-Strike: Global Offensive (CS:GO) Competitions    Saudi Karate Team Wins Four Medals in World Youth League Championship    Third Edition of FIFA Forward Program Kicks off in Riyadh    Evacuated from Sudan, 187 Nationals from Several Countries Arrive in Jeddah    SPA Documents Thajjud Prayer at Prophet's Mosque in Madinah    SFDA Recommends to Test Blood Sugar at Home Two or Three Hours after Meals    SFDA Offers Various Recommendations for Safe Food Frying    SFDA Provides Five Tips for Using Home Blood Pressure Monitor    SFDA: Instant Soup Contains Large Amounts of Salt    Mawani: New shipping service to connect Jubail Commercial Port to 11 global ports    Custodian of the Two Holy Mosques Delivers Speech to Pilgrims, Citizens, Residents and Muslims around the World    Sheikh Al-Issa in Arafah's Sermon: Allaah Blessed You by Making It Easy for You to Carry out This Obligation. Thus, Ensure Following the Guidance of Your Prophet    Custodian of the Two Holy Mosques addresses citizens and all Muslims on the occasion of the Holy month of Ramadan    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Global economy: Outlook worsens as global recession looms, says IMF
Published in The Saudi Gazette on 27 - 07 - 2022

Still reeling from the COVID pandemic and Russia's invasion of Ukraine, the global economy is facing an increasingly murky and uncertain outlook, according to the latest report released on Tuesday by the International Monetary Fund (IMF).
The World Economic Outlook Update July 2022: Gloomy and More Uncertain, highlights the significant consequences of the stalling of the world's three main economic powerhouses – the United States, China and the major European economies.
"The outlook has darkened significantly since April," said Pierre-Olivier Gourinchas, IMF Economic Counsellor and Director of Research.
"The world may soon be teetering on the edge of a global recession, only two years after the last one".
The baseline forecast for global growth is for it to slow from 6.1 per cent last year, to 3.2 percent in 2022 – 0.4 percent lower than forecast in the last Outlook update in April.
With higher-than-expected inflation – especially in the US and the largest European economies – global financial conditions are becoming tighter.
In the US, reduced household purchasing power and tighter monetary policy will drive growth down to 2.3 per cent this year and one percent next year, according to the outlook.
China's slowdown has been worse than anticipated amid COVID-19 outbreaks and lockdowns, with negative effects from Russia's invasion of Ukraine continuing.
Moreover, further lockdowns and a deepening real estate crisis there has pushed growth down to 3.3 percent this year – the slowest in more than four decades, excluding the pandemic.
And in the Eurozone, growth has been revised down to 2.6 percent this year and 1.2 percent in 2023, reflecting spillovers from the Ukraine war and tighter monetary policy.
"As a result, global output contracted in the second quarter of this year," said Gourinchas.
Inflation
Despite the global slowdown, inflation has been revised up, in part due to rising food and energy prices.
This year it is anticipated to reach 6.6 percent in advanced economies and 9.5 percent in emerging market and developing economies – representing upward revisions of 0.9 and 0.8 percentage points respectively. And it is projected to remain elevated for longer.
Broadened inflation in many economies reflects "the impact of cost pressures from disrupted supply chains and historically tight labour markets," the IMF official stated.
The report outlines some risks ahead, including that the war in Ukraine could end European gas supply from Russia altogether; rising prices could cause widespread food insecurity and social unrest; and geopolitical fragmentation may impede global trade and cooperation.
Inflation could remain stubbornly high if labour markets remain overly tight or inflation expectations are too optimistic and prove more costly than expected.
And renewed COVID-19 outbreaks and lockdowns threaten to further suppress China's growth.
"In a plausible alternative scenario where some of these risks materialize...inflation will rise and global growth decelerate further to about 2.6 percent this year and two per cent next year, a pace that growth has fallen below just five times since 1970," said the IMF economist.
"Under this scenario, both the United States and the Euro area experience near-zero growth next year, with negative knock-on effects for the rest of the world".
Current inflation levels represent a clear risk to macroeconomic stability, according to the outlook.
Responding to the situation, central banks in advanced economies are withdrawing monetary support faster than expected, while many in emerging market and developing economies began raising interest rates last year.
"The resulting synchronized monetary tightening across countries is historically unprecedented, and its effects are expected to bite, with global growth slowing next year and inflation decelerating," said Gourinchas.
While acknowledging that tighter monetary policy would have economic costs, the IMF official upheld that delaying it would only exacerbate hardship.
And hampered by difficulties in coordinating creditor agreements, how and whether debt can be restructured, remains unpredictable.
He argued that domestic policies responding to the impacts of high energy and food prices should focus on those most affected, without distorting prices.
"Governments should refrain from hoarding food and energy and instead look to unwind barriers to trade such as food export bans, which drive world prices higher," advised the IMF official.
Meanwhile, mitigating climate change continues to require prompt multilateral action to limit emissions and raise investment to accelerate a "green transition".
Policymakers are urged to ensure that measures are temporary and only cover energy shortfalls and climate policies.
From climate transition and pandemic preparedness to food security and debt distress, multilateral cooperation is key, said the IMF economist.
"Amid great challenge and strife, strengthening cooperation remains the best way to improve economic prospects and mitigate the risk of geoeconomic fragmentation," he underscored. — UN News


Clic here to read the story from its source.