The International Monetary Fund (IMF), a financial agency of the United Nations, warned Tuesday that the “worst is yet to come” for the global economy as economic indicators suggest the world will likely face a recession in 2023.
The global economy currently possesses the world’s weakest growth profile since 2001, excluding the COVID-19 pandemic and the 2008 global financial crisis, according to the agency’s World Economic Outlook. The IMF claimed that soaring energy prices and supply chain disruptions exacerbated by Russia’s invasion of Ukraine could send the global economy into a recession. (RELATED: UN Chief Calls For Energy Taxes In The Midst Of A Global Energy Crisis)
“The worst is yet to come, and for many people 2023 will feel like a recession,” the outlook states. The IMF also predicts that worldwide inflation will peak toward the end of 2022, increasing from 4.7% in 2021 to 8.8%.
Although the agency forecasts that global inflation will fall to 6.5% in 2023 and 4.1% by 2024, it notes that high levels of inflation will remain “longer than previously expected.”
Global growth will decrease in 2023 to 2.7%, with a 25% probability that it will fall below 2%, according to the report.
An exterior view of the building of the International Monetary Fund (IMF), with the IMG logo, is seen on March 27, 2020 in Washington, DC. (Photo by OLIVIER DOULIERY/AFP via Getty Images)
The global energy crisis, particularly in Europe, will weaken economies further as shortages of natural gas are driving countries to spend billions to help citizens pay their soaring electricity bills, according to the IMF. Russia, which accounted for 40% of the European Union’s (EU) gas consumption, has continuously disrupted gas deliveries into Europe in response to EU sanctions.
“Winter 2022 will be challenging for Europe, but winter 2023 will likely be worse,” the report reads.
China’s economic slowdown is also contributing to a looming recession as its strict COVID policies are forcing economic activity to be artificially curtailed, according to the IMF. China’s lockdowns are contributing to declining global trade as the nation is the world’s second-largest economy and is a massive consumer market.
“More than a third of the global economy will see two consecutive quarters of negative growth, while the three largest economies — the United States, the European Union and China — will continue to slow,” the IMF outlook reads.
The IMF did not immediately respond to the Daily Caller News Foundation’s request for comment.
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