IMF Warns of “Lost Decade” for Economic Growth
(12 April 2023 – Global) The International Monetary Fund (IMF) warns the global economy faces “feeble and uneven growth” that will remain ingrained as a major headwind until 2030.
The IMF’s baseline forecast is for growth to fall from six percent in 2021, 3.2 percent in 2022 and 2.7 percent in 2023, before levelling out at three percent in 2024. The fund suggests the global economy is not expected to return to pre-pandemic growth levels for the rest of the decade.
In the IMF’s latest economic outlook the fund slashed its outlook for the Australian economy due to the cost-of-living crisis set to remain firmly in place. Tentative signs G20 economies would canter towards a “soft landing” of weaker inflation and steady economic growth has now evaporated as a direct result of financial markets instability, geopolitical tensions in Ukraine and Taiwan and the lagging impact of rapidly rising interest rates.
“We are faced with an economic situation that his more difficult with global growth that is slowing and persistent inflation in many countries. Global growth should be below 3 per cent in 2023, which is one of the weakest rates for decades, excluding the COVID pandemic and the financial crisis in 2008” commented French Finance Minister Bruno Le Maire.
US Treasury Secretary Janet Yellen contended the IMF’s pessimistic forecast.
“I’ve not really seen evidence at this stage suggesting a contraction in credit, although that is a possibility. The US economy is obviously performing exceptionally well with continued solid job creation, inflation gradually moving down and robust consumer spending. So I’m not anticipating a downturn in the economy, although of course that remains a risk” Dr Yellen stated.
“The global financial system also remains resilient due to the significant reforms that nations took after the financial crisis. The US banking system remains sound, with strong capital and liquidity positions” Dr Yellen added.
Subscribe