“The horizon has darkened” on the world economy, noted Monday the managing director of the International Monetary Fund (IMF) Kristalina Georgieva during a conference in Davos, excluding however a risk of global recession. “The year will be hard,” warned the leader during this panel on the global economic outlook, and at a time when the extent of the consequences of the war in Ukraine is very uncertain. “We are experiencing a shock on the price of raw materials, and particularly on food prices” which are experiencing a historic surge, said the director general.
The Washington institution in April lowered its global growth forecast to 3.6% this year due to the “seismic waves” of the war on the economy, down 0.8 points from previous expectations. Since these forecasts, “the horizon has darkened” and to the war have been added the economic consequences of the confinements in China as well as the more marked tightening of monetary policy in many countries, including the United States, in the face of high inflation. The effects of the war could worsen further, and fears of a global recession are beginning to sprout among a growing number of economic observers.
In a report published Monday, the OECD, which includes all developed countries, said that the G7 countries had recorded in the first quarter a decline in their growth of 0.1%, quarter on quarter. A recession is not on the horizon “right now, but that doesn’t mean it’s out of the question,” Kristalina Georgieva said Monday, in response to a question about recession risks in within developed countries. On global recession risks, the leader ruled them out, while saying that “we will see recessions in some countries that have not recovered from the Covid crisis, are very dependent on Russia or of the import of food goods, and already present weaknesses”.
SEE ALSO – The war in Ukraine highlights Europe’s need for energy security, according to the IMF
