The International Monetary Fund will cut its global economic growth outlook "substantially" in its next update, as finance chiefs grapple with a shrinking list of options to address the worsening risks.
Surging food and energy prices, slowing capital flows to emerging markets, the ongoing pandemic and a slowdown in China make it "much more challenging" for policymakers, Ceyla Pazarbasioglu, the IMF's director for strategy, policy and review, said yesterday at a panel in Bali, Indonesia. "It's shock after shock after shock which are really hitting the global economy."
She spoke after the Group of 20 finance ministers and central bank governors ended their meeting on Saturday without reaching a communique, underlining the difficulty in coordinating a global response to surging inflation and recessionary fears.
The IMF already downgraded its outlook for the global expansion this year to 3.6 percent, from 4.4 percent before the war in Ukraine, in its April report. In a review due this month, "we will downgrade our forecast substantially," Pazarbasioglu said.
"The path to a soft landing is narrowing; we think it is still a feasible path but certainly not a very easy one," said Hyun Song Shin, head of research at the Bank for International Settlements, at the same panel.
