Beautiful Virgin Islands

Wednesday, Aug 27, 2025

IMF downgrades global economy forecast amid ‘storm clouds’ warning

IMF downgrades global economy forecast amid ‘storm clouds’ warning

The International Monetary Fund is downgrading its outlook for the world economy for 2023, citing a long list of threats that include Russia’s war against Ukraine, chronic inflation pressures, punishing interest rates and the lingering consequences of the global pandemic.

The lending agency forecast on Tuesday that the global economy would eke out growth of just 2.7 percent next year, down from the 2.9 percent it had estimated in July.

The IMF left unchanged its forecast for international growth this year — a modest 3.2 percent, a sharp deceleration from last year’s 6 percent expansion.

“The global environment is fragile with storm clouds on the horizon,” the report stated.

Lingering market vulnerabilities, tightening liquidity, stubborn inflation and ongoing efforts by central banks worldwide to raise rates to combat it have combined to create a volatile and risky environment, the report stated.

“With investors aggressively pulling back from risk-taking recently as they reassess their economic and policy outlook, there is a danger of a disorderly repricing of risk,” the report stated. “In particular, volatility and a sudden tightening in financial conditions could interact with, and be amplified by, preexisting financial vulnerabilities.”

The IMF warned that any sharp downturn would be acutely felt by emerging market economies, where they are grappling with a “multitude of risks” like high borrowing costs, high inflation, and volatile commodity markets.

The IMF also cautioned that credit spreads have widened substantially in the corporate sector, and higher rates could adversely impact housing markets.

In China, the property sector downturn has already deepened, and failures of property developers could spill over into the banking sector, the IMF cautioned. However, the fund foresees China’s economy growing just 3.2 percent this year, down drastically from 8.1 percent last year.

While banks in advanced economies seem to have sufficient capital and liquidity, the IMF noted that in its global bank stress test, up to 29 percent of emerging market banks would breach their capital requirements in a severe global recession, leading to a capital shortfall of over $200 billion. US banks will report third-quarter earnings starting this week and are expected to show weaker profits.

The IMF slashed its outlook for growth in the US to 1.6 percent this year, down from a July forecast of 2.3 percent. It expects meager 1 percent US growth next year.

In the IMF’s view, the collective economy of the 19 European countries that share the euro currency, reeling from crushingly high energy prices caused by Russia’s attack on Ukraine and Western sanctions against Moscow, will grow just 0.5 percent in 2023.

Saudi Arabia


According to the IMF report, Saudi Arabia’s annual world output projections dropped by 2.4 percent in October from July’s forecasts to reach 4.5 percent – when comparing the fourth quarter of 2022 to the same period of the previous year.

The Kingdom’s 2023 predictions remained unchanged at 3.7 percent growth year-on-year.

As for the IMF’s growth predictions, Saudi Arabia remained at a 7.6 percent output increase in 2022, with a 3.7 percent output increase the following year.

Saudi Arabia’s real gross domestic product is forecast to rise 3.4 percent annually by the end of this year to reach 7.6 percent, showed the IMF data.

The Kingdom’s GDP is expected to increase by a modest 2.4 percent in 2023 year on year, and recover to 3.8 percent growth the following year.

Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Manhunt in Australia: Armed Anti-Government Suspect Kills Police Officers Sent to Arrest Him
China Launches World’s Most Powerful Neutrino Detector
How Beijing-Linked Networks Shape Elections in New York City
Ukrainian Refugee Iryna Zarutska Fled War To US, Stabbed To Death
Elon Musk Sues Apple and OpenAI Over Alleged App Store Monopoly
2 Australian Police Shot Dead In Encounter In Rural Victoria State
Vietnam Evacuates Hundreds of Thousands as Typhoon Kajiki Strikes; China’s Sanya Shuts Down
UK Government Delays Decision on China’s Proposed London Embassy Amid Concerns Over Redacted Plans
A 150-Year Tradition to Be Abolished? Uproar Over the Popular Central Park Attraction
A new faith called Robotheism claims artificial intelligence isn’t just smart but actually God itself
Deputy Prime Minister Angela Rayner Purchases Third Property Amid Housing Tax Reforms Debate
HSBC Switzerland Ends Relationships with Over 1,000 Clients from Saudi Arabia, Lebanon, Qatar, and Egypt
Sharia Law Made Legally Binding in Austria Despite Warnings Over 'Incompatible' Values
Italian Facebook Group Sharing Intimate Images Without Consent Shut Down Amid Police Investigation
Dutch Foreign Minister Resigns Amid Deadlock Over Israel Sanctions
Trump and Allies Send Messages of Support to Ukraine on Independence Day Amid Ongoing Conflict
China Reels as Telegram Chat Group Shares Hidden-Camera Footage of Women and Children
Sam Nicoresti becomes first transgender comedian to win Edinburgh Comedy Award
Builders uncover historic human remains in Lancashire house renovation
Australia Wants to Tax Your Empty Bedrooms
MotoGP Cameraman Narrowly Avoids Pedro Acosta Crash at Hungarian Grand Prix
FBI Investigates John Bolton Over Classified Documents in High-Profile Raids
Report reveals OpenAI pitched national ChatGPT Plus subscription to UK ministers
Labour set to freeze income tax thresholds in long-term 'stealth' tax raid
Coca‑Cola explores sale of Costa coffee chain
Trial hears dog walker was chased and fatally stabbed by trio
Restaurateur resigns from government hospitality council over tax criticism
Spanish City funfair shut after serious ride injury
Suspected arson at Ilford restaurant leaves three in critical condition
Tottenham beat Manchester City to go top of Premier League
Bank holiday heatwave to hit 30°C before remnants of Hurricane Erin arrive
UK to deploy immigration advisers to West Africa to block fake visas
Nurse who raped woman continued working for a year despite police alert
Drought forces closures of England’s canal routes, canceling boat holidays
Sweet tooth scents: food-inspired perfumes surge as weight-loss drugs suppress appetites
Experts warn Britain dangerously reliant on imported food
Family of Notting Hill Carnival murder victim call event unmanageable
Bunkers, Billions and Apocalypse: The Secret Compounds of Zuckerberg and the Tech Giants
Ukraine Declares De Facto War on Hungary and Slovakia with Terror Drone Strikes on Their Gas Lifeline
Animated K-pop Musical ‘KPop Demon Hunters’ Becomes Netflix’s Most-Watched Original Animated Film
New York Appeals Court Voids Nearly $500 Million Civil Fraud Penalty Against Trump While Upholding Fraud Liability
Elon Musk tweeted, “Europe is dying”
Far-Right Activist Convicted of Incitement Changes Gender and Demands: "Send Me to a Women’s Prison" | The Storm in Germany
Hungary Criticizes Ukraine: "Violating Our Sovereignty"
Will this be the first country to return to negative interest rates?
Child-free hotels spark controversy
North Korea is where this 95-year-old wants to die. South Korea won’t let him go. Is this our ally or a human rights enemy?
Hong Kong Launches Regulatory Regime and Trials for HKD-Backed Stablecoins
China rehearses September 3 Victory Day parade as imagery points to ‘loyal wingman’ FH-97 family presence
Trump Called Viktor Orbán: "Why Are You Using the Veto"
×