the IMF greatly reduces the outlook for global economic growth

The institution now expects global growth of 3.6% this year against the 4.4% expected in its January forecast.

Effects similar to “seismic waves emanating from the epicenter of an earthquake”: the war in Ukraine has greatly darkened the outlook for the world economy, Pierre-Olivier Gourinchas, the Fund’s new chief economist, warned Tuesday of international currency.

The IMF, which published its updated forecasts at its spring meetings, now expects global growth of 3.6% this year against 4.4% in January.

“The conflict and the sanctions directly affect Ukraine, Russia and Belarus”, explain the economists of the Washington institution. “But the international collapse is spreading more, especially in Europe, through commodity prices, commercial and financial links, supply (of food and energy products, editor’s note) and the humanitarian impact . “

Because Ukraine and Russia are important producers of grain for many countries, and Russia is also a major source of energy for Europe.

Therefore, the IMF changed the economic forecasts of so many countries. Thus, GDP growth in the United States decreased to 3.7% (-0.3 points).

This new projection considers “the faster than expected withdrawal of financial support to contain inflation as well as the impact of weaker growth of their trading partners (…) resulting from the war” in Ukraine, the IMF detailed.

China’s economy is suffering from a zero tolerance policy to a pandemic that has led to many shutdowns, including the economic capital, Shanghai. Growth should drop to 4.4% (-0.4 points) after 8.1% last year.

The euro zone weakened

For euro zone countries, the breakdown was even greater: +2.8% against +3.9% in January.

Germany, which relies heavily on Russia for energy supplies, sees its forecast decline by 1.7 points to 2.1%.

“Because they are energy importers, rising world prices represent a negative shock,” the IMF summarized.

Growth in France decreased to 2.9%, that in Italy to 2.3%. For Russia, which invaded Ukraine on February 24, it was a plunge: its GDP would drop by 8.5%.

Despite the sanctions against Moscow, it is mainly the Ukrainian economy that is falling: -35% is expected this year, due to the massive destruction that has caused millions of people to flee.

And, it will take many years for the country to recover from this battle even if it stops immediately.

Elsewhere in the world, oil -exporting countries are doing well on the back of rising prices. The growth forecast of Saudi Arabia thus reaches 7.6% (+2.8 points).


In general, the impact of the war in Ukraine was stronger because of what happened when the economy had not yet fully recovered from the pandemic.

The rivalry is also exacerbated by the dizzying rise in prices.

The IMF expects inflation to be 5.7% this year for advanced countries (+1.8 points) and 8.7% (+2.8 points) for emerging and developing economies.

The peak should be reached this year, he said. But even in 2023, inflation should still be higher than central bank targets in advanced countries and remain very high in emerging and developing countries (6.5%).

The IMF, which also downgraded the outlook for global growth for 2023 (+3.6%, -0.2 points), warns about many clouds on the horizon.

“In general, the risks are (…) comparable to the situation at the beginning of the pandemic,” he said.

social unrest?

The first danger is the stalemate of war, the aggravation of the humanitarian crisis and the sanctions.

Rising prices are likely to provoke social protests that could worsen in countries hosting large numbers of refugees.

In addition, “record levels of debt caused by the pandemic are leaving emerging markets and emerging economies more vulnerable to interest increases”, the IMF also said.

Moreover, the resurgence of the pandemic was not included.

Finally, “the deterioration of international relations could undermine the trust and cooperation essential to meeting long-term challenges, especially climate change”, the IMF worries.

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