Beautiful Virgin Islands

Monday, Jul 14, 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
Air India Pilot’s Mental Health Records Under Scrutiny
Google Secures Windsurf AI Coding Team in $2.4 Billion Licence Deal
Jamie Dimon Warns Europe Is Losing Global Competitiveness and Flags Market Complacency
South African Police Minister Suspended Amid Organised Crime Allegations
Nvidia CEO Claims Chinese Military Reluctance to Use US AI Technology
Hong Kong Advances Digital Asset Strategy to Address Economic Challenges
Australia Rules Out Pre‑commitment of Troops, Reinforces Defence Posture Amid US‑China Tensions
Martha Wells Says Humanity Still Far from True Artificial Intelligence
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
U.S. Resumes Deportations to Third Countries After Supreme Court Ruling
Excavation Begins at Site of Mass Grave for Children at Former Irish Institution
Iranian President Reportedly Injured During Israeli Strike on Secret Facility
EU Delays Retaliatory Tariffs Amid New U.S. Threats on Imports
Trump Defends Attorney General Pam Bondi Amid Epstein Memo Backlash
Renault Shares Drop as CEO Luca de Meo Announces Departure Amid Reports of Move to Kering
Senior Aides for King Charles and Prince Harry Hold Secret Peace Summit
Anti‑Semitism ‘Normalised’ in Middle‑Class Britain, Says Commission Co‑Chair
King Charles Meets David Beckham at Chelsea Flower Show
If the Department is Really About Justice: Ghislaine Maxwell Should Be Freed Now
NYC Candidate Zohran Mamdani’s ‘Antifada’ Remarks Spark National Debate on Political Language and Economic Policy
President Trump Visits Flood-Ravaged Texas, Praises Community Strength and First Responders
From Mystery to Meltdown, Crisis Within the Trump Administration: Epstein Files Ignite A Deepening Rift at the Highest Levels of Government Reveals Chaos, Leaks, and Growing MAGA Backlash
Trump Slams Putin Over War Death Toll, Teases Major Russia Announcement
Reparations argument crushed
Rainmaker CEO Says Cloud Seeding Paused Before Deadly Texas Floods
A 92-year-old woman, who felt she doesn't belong in a nursing home, escaped the death-camp by climbing a gate nearly 8 ft tall
French Journalist Acquitted in Controversial Case Involving Brigitte Macron
Elon Musk’s xAI Targets $200 Billion Valuation in New Fundraising Round
Kraft Heinz Considers Splitting Off Grocery Division Amid Strategic Review
Trump Proposes Supplying Arms to Ukraine Through NATO Allies
EU Proposes New Tax on Large Companies to Boost Budget
Trump Imposes 35% Tariffs on Canadian Imports Amid Trade Tensions
Junior Doctors in the UK Prepare for Five-Day Strike Over Pay Disputes
US Opens First Rare Earth Mine in Over 70 Years in Wyoming
Kurdistan Workers Party Takes Symbolic Step Towards Peace in Northern Iraq
Bitcoin Reaches New Milestone of $116,000
Biden’s Doctor Pleads the Fifth to Avoid Self-Incrimination on President’s Medical Fitness
Grok Chatbot Faces International Backlash for Antisemitic Content
Severe Heatwave Claims 2,300 Lives Across Europe
NVIDIA Achieves Historic Milestone as First Company Valued at $4 Trillion
Declining Beer Consumption Signals Cultural Shift in Germany
Linda Yaccarino Steps Down as CEO of X After Two Years
US Imposes New Tariffs on Brazilian Exports Amid Political Tensions
Azerbaijan and Armenia are on the brink of a historic peace deal.
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Weinstein Victim’s Lawyer Says MeToo Movement Still Strong
U.S. Enacts Sweeping Tax and Spending Legislation Amid Trade Policy Shifts
Football Mourns as Diogo Jota and Brother André Silva Laid to Rest in Portugal
×