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The IMF again revises down its estimates for



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The International Monetary Fund (IMF) has again revised downwards its estimates of global economic growth, warning that risks arising from high inflation and the war in Ukraine are beginning to materialize and, if unchecked, could throw off the global economy in recession, informs Reuters.

In an update to the “World Economic Outlook” report, published on Tuesday by the international financial institution, the global Gross Domestic Product would register an advance of 3.2% in 2022, compared to the 3.6% growth forecast in April. The IMF adds that world GDP may have contracted in the second quarter due to slowdowns in China and Russia.

The fund also revised its estimates for 2023, when the world economy is forecast to register an advance of 2.9%, compared to a growth of 3.6% estimated in April, the reason for this revision being the impact of a tighter monetary policy .

“The outlook worsened significantly after April. The world could soon be on the brink of a global recession, just two years after the last recession,” said IMF Chief Economist Pierre-Olivier Gourinchas.

The International Monetary Fund pointed out that its latest forecasts are “extremely uncertain”, being subject to downside risks stemming from the war in Ukraine and the explosion of energy and food prices. According to a “plausible” alternative scenario, which includes a complete stoppage of Russian gas supplies to Europe and a further 30% reduction in Russian oil exports, the IMF estimates that the growth rate of the world economy would slow down to 2 .6% in 2022 and to 2% in 2023, and Europe and the US would register close to zero growth next year.

According to the IMF, global economic growth has fallen below 2% only five times since 1970, including the recession caused by the COVID pandemic in 2020.

The latest IMF report does not include new figures regarding Romania. The financial institution mentions the fact that it revised its estimates regarding emerging and developing Europe, a region where Romania is included, which according to the update published on Tuesday would record a contraction of 1.4% this year, with 1 .5 percentage points lower than expected in April, followed by an advance of 0.9% in 2023, with 0.4 percentage points less than previously estimated, as a result of a higher than expected increase in Russian exports in 2022 and of the new sanctions that will be imposed on Russia in 2023.

In the case of Romania, the International Monetary Fund forecast in April that the Romanian economy will slow down from an advance of 5.9% in 2021, to 2.2% in 2022, so that next year it will accelerate to 3.4%.