The International Monetary Fund’s significant downward revision to its 2022 World Economic Outlook, just one quarter into the calendar year, has generated headlines and hand-wringing around the world. But no less important is the dour forecast for 2023, which implies a broader crisis of prevailing growth models.
CAMBRIDGE – The International Monetary Fund’s revised World Economic Outlook (WEO) is sobering. It is rare for the organization to revise down sharply its projections for economic growth just one quarter into the calendar year. Yet in this case, it has done so for 86% of its 190 member countries, resulting in a decline of almost one percentage point in global growth for 2022 – from 4.4% to 3.6%. Moreover, this forecast is accompanied by a significant increase in projected inflation, and all this bad news is packaged in a wrapping of deeper uncertainty. There is a downward bias in the balance of risks, and inequality is expected to worsen both within and across countries.
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