World economy on brink of ‘cold war two’, IMF official warns

The world economy is on the brink of a second cold war that could “annihilate” progress made since the collapse of the Soviet Union, a senior International Monetary Fund official has warned. Gita Gopinath, the IMF’s first deputy managing director, said the accelerating fragmentation of the world economy into regional power blocs – centred around the US and China – risked wiping out trillions of dollars in global output. “If we descend into cold war two, knowing the costs, we may not see mutually assured economic destruction. But we could…

The Guardian view on the world economy: another bleak era beckons | Editorial

Remember the roaring 20s? Even as Covid gripped the world, optimists piped up that the economy would come roaring out of the pandemic, bolstering incomes and kickstarting an almighty boom. Harking back to the Spanish flu pandemic of a century earlier, they saw a decade of glorious growth ahead. Well, they were wrong. Ahead lies not roaring but snoring; no boom, but ever-deepening gloom. That is the message from the International Monetary Fund and the World Bank, which are holding their spring meetings in Washington DC this week. In its…

Global economic forecast for 2023? A stormy start followed by a ray of hope

Investors should brace for another turbulent year in the financial markets, economists have warned as central banks fight inflation, China reopens its economy after Covid-19 restrictions and the Ukraine war pushes the global economy towards recession. The first half of the new year is likely to be choppy, according to Wall Street predictions, after global markets suffered their biggest fall since the 2008 financial crisis last year. But the US S&P 500 is still expected to end 2023 a little higher than it began the year. The average target of…

Third of world economy to hit recession in 2023, IMF head warns

For much of the global economy, 2023 is going to be a tough year as the main engines of global growth – the US, Europe and China – all experience weakening activity, the head of the International Monetary Fund has warned. The new year is going to be “tougher than the year we leave behind,” IMF managing director Kristalina Georgieva said on the CBS Sunday morning news program Face the Nation on Sunday. “Why? Because the three big economies – the US, EU and China – are all slowing down…

The world’s engines are spluttering: IMF points to deeper problems beyond 2022

The International Monetary Fund’s revised World Economic Outlook is sobering. It is rare for the organisation to revise down sharply its projections for economic growth only 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…

IMF warns China over cost of Covid lockdowns

China, the world’s second largest economy, should review its zero-tolerance approach to the pandemic or risk damaging the global recovery, according to the head of International Monetary Fund. Kristalina Georgieva said Beijing should reassess the use of lockdowns to limit the spread of the highly contagious Omicron variant since it became clear the harm to human health was less severe than the Delta variant. Speaking at the World Economic Forum on a virtual panel, she said that while the hardline approach had contained the pandemic in China for “quite some…