- Two elephants die in flash flooding in northern Thailand
- Tunisia votes with Saied set for re-election
- Too hot by day, Dubai's floodlit beaches are packed at night
- A 'forgotten' valley in storm-hit North Carolina, desperate for help
- Italy targets climate activists in 'anti-Gandhi' demo clampdown
- US trade chief defends tariff hikes when paired with investment
- EU court blocks French ban on vegetable 'steak' labelling
- Meta AI turns pictures into videos with sound
- US dockworkers return to ports after three-day strike
- DR Congo to begin mpox vaccination campaign Saturday in east
- Meta must limit data use for targeted ads: EU court
- Oil extends gains, jobs report lifts Wall Street
- US hiring soars past expectations in sign of resilient market
- As EU targets Chinese cars, European rivals sputter
- Top EU court finds against FIFA in key transfer market ruling
- Oil extends gains, Hong Kong stocks resume rally
- 'A man provides': Ukrainian miners send families away as Russia advances
- EU states greenlight extra tariffs on EVs from China
- Hong Kong stocks resume rally, oil dips after Middle East-fuelled surge
- Crude stable after Israel-Iran surge, Hong Kong stocks resume gains
- Hera spacecraft to probe asteroid deflected by defence test
- US dockworkers to head back to work after tentative deal
- After Helene's destruction, North Carolina starts to rebuild
- Dockers end three-day strike at Montreal port
- What next for OpenAI after $157 billion bonanza?
- Israel-Hamas war causes 86-percent dive in Gaza GDP: IMF
- Milan's Morata moves house after Inter-fan town mayor 'violates' privacy
- 'Devastating' storm hits Augusta National but Masters will go on
- Relief in Brazil, Asia over delay to EU deforestation rules
- Oil prices jump, stocks fall on Middle East tensions
- Biden says 'discussing' possible Israeli strikes on Iran oil facilities
- Oil prices rise, stocks fall on Middle East tensions
- Oil rallies, stocks mostly retreat on Middle East tensions
- Phasing out teen smoking could save 1.2 mn lives: study
- 'Welcome relief': Asia producers hail EU deforestation law delay
- Japan PM slated to announce plans for 'happiness index'
- Turkish inflation falls less than expected in September at 49.4%
- Easing inflation lifts profit at UK supermarket Tesco
- Skiing calls on UN climate science to combat melting future
- China wine industry looks to breed climate resilience
- Tokyo rallies on weak yen, Hong Kong drops after surge
- Dutch airline KLM unveils 'firm' cost-cutting measures
- Carpe diem: the Costa Rican women turning fish into fashion
- Senegal looks to aquaculture as fish stocks dwindle
- Will AI one day win a Nobel Prize?
- Climate change, economics muddy West's drive to curb Chinese EVs
- Argentina's Milei vetoes university budget after huge protests
- TotalEnergies plans to grow oil and gas production until 2030
- 2024 Nobels offer glimmer of hope as global crises mount
- Tokyo rallies on weak yen, Hong Kong reverses after surge
IMF cuts 2023 global growth, warns major economies to stall
Global growth is expected to slow further next year, the IMF said Tuesday, downgrading its forecasts as countries grapple with the fallout from Russia's invasion of Ukraine, spiraling cost-of-living and economic downturns.
The world economy has been dealt multiple blows, with the war in Ukraine driving up food and energy prices following the coronavirus outbreak, while soaring costs and rising interest rates threaten to reverberate around the globe.
"This year's shocks will re-open economic wounds that were only partially healed post-pandemic," said International Monetary Fund economic counsellor Pierre-Olivier Gourinchas in a blog post accompanying the fund's latest World Economic Outlook.
More than a third of the global economy is headed for contraction this year or next, and the three biggest economies –- the United States, European Union and China –- will continue to stall, he warned.
"The worst is yet to come and, for many people 2023 will feel like a recession," said Gourinchas.
In its report, the IMF trimmed its 2023 global GDP forecast to 2.7 percent, 0.2 points down from July expectations.
Its world growth forecast for this year remains unchanged at 3.2 percent.
The global growth profile is its "weakest" since 2001, apart from during the global financial crisis and the worst of the pandemic, the IMF said.
This reflects slowdowns for the biggest economies, including a US GDP contraction in the first half of 2022 and continued lockdowns in China as it faces a property market crisis.
- Laser focus -
A key factor behind the slowdown is a shift in policy as central banks try to bring down soaring inflation, with higher interest rates starting to take the heat out of domestic demand.
Growing price pressures are the most immediate threat to prosperity, said Gourinchas in the report, adding that central banks are now "laser-focused on restoring price stability".
Global inflation is expected to peak at 9.5 percent this year before dropping to 4.1 percent by 2024.
Misjudging the persistence of inflation could prove detrimental to future macroeconomic stability, he warned, "by gravely undermining the hard-won credibility of central banks."
Asked about the Federal Reserve's rate hikes, Gourinchas told a press briefing on Monday that the IMF is not calling for an acceleration, but this "doesn't mean that they should pause on the path... that we've seen" either.
This is because banks were starting from a point where rates were historically low as countries emerged from the pandemic, he said.
Current challenges do not mean a large downturn is inevitable, but the fund also warned many low-income countries are either in, or close to debt distress.
Progress toward debt restructurings for the hardest-hit is needed to avoid a wave of sovereign debt crisis.
"Time may soon be running out," said Gourinchas.
While the G20 has agreed on a "common framework" for debt restructuring for the poorest countries, only three have qualified and "more progress is needed," he told reporters.
- US slowdown -
The IMF has also cut forecasts for the world's two biggest economies, the United States and China.
US economic growth for this year is now pegged at 1.6 percent, 0.7 points below the fund's July forecast, due to an "unexpected real GDP contraction in the second quarter," the IMF said.
"Declining real disposable income continues to eat into consumer demand, and higher interest rates are taking an important toll on spending," the report added.
The Federal Reserve has been raising interest rates aggressively to tamp down surging inflation, which is slowing economic activity. And the central bank has said more increases are likely to come.
A slowdown in the Euro area is expected to deepen next year, with the German and Italian economies slightly contracting, the IMF projects.
China's economy is expected to grow at only 3.2 percent this year -- its lowest rate in decades, apart from the initial coronavirus outbreak.
The fund cautioned that a worsening of China's property sector slump could spill over to the domestic banking sector and weigh heavily on growth.
P.Schmidt--CPN