The IMF recently updated its World Economic Outlook publication for July 2022. The report is not a positive one. The IMF claims the economic outlook is “gloomy and uncertain.” The global economy is expected to grow by 3.2%. This is a .4% decrease from the April report and a 2.9% decrease from last year of 6.1%.
Many significant events throughout the year have caused a decrease in global economic growth. One event is the war in Ukraine. With the war still going on, it may force Russia to halt gas imports to other European countries. This will further hurt the European economy. China is dealing with lockdowns and issues in its property sector. This will affect China’s domestic economy and the supply chain, which will negatively affect the global economy.
The IMF believes correcting inflation is the first step to fixing the global economy. The pandemic has caused governments to expand budgets and spending to combat the financial problems. However, the IMF suggests that governments should increase taxes and lower spending to offset the increased expenditure.