The International Monetary Fund (IMF) warned on Sunday that the global economic outlook now is even more bleak than predicted last month, as purchasing manager surveys have been steadily worsening in recent months.
Sluggish growth in China, supply disruptions and food insecurity as a result of Russia’s invasion of Ukraine were all cited as reasons for the gloomier forecast.
The international financial institution lowered its forecast for global growth in 2023 last month, from 2.9% to 2.7%.
Recently high-frequency indicators “confirm that the outlook is gloomier,” the IMF wrote in a blog post in advance of a summit of G20 leaders in Indonesia.
The report stated that recent purchasing manager indexes, which measure manufacturing and services activity, indicated deterioration in most Group of 20 major nations, with economic growth expected to shrink and inflation remaining persistently high.
“Readings for a growing share of G20 countries have fallen from expansionary territory earlier this year to levels that signal contraction,” the IMF said, adding that global fragmentation added to “a confluence of downside risks.”
“The challenges that the global economy is facing are immense and weakening economic indicators point to further challenges ahead,” the IMF said, adding that the current policy environment was “unusually uncertain.”