IMF: One third of global economy to experience negative growth
International Monetary Fund Managing Director Kristalina Georgieva says that increasing food import costs would result in a $9 billion shortfall in developing nations' balance of payments.
International Monetary Fund (IMF) Managing Director Kristalina Georgieva, reaffirmed, on Monday, that one-third of the global economy will experience negative growth for two straight quarters, at least, in 2022 and 2023.
During a virtual conversation with World Bank President, David Malpass, Georgieva stated that "The risk of recession has gone up. We have calculated that about one-third equivalent of the world economy would have at least two consecutive quarters of negative growth this year and next year."
Forecasts further predict for the global output to decline by about $4 trillion between now and 2026, noting that the recession affects nations that account for one-third of global GDP, according to Georgieva.
"What the world needs is somewhere between $3 trillion and $6 trillion; we are not even close to this number," she added.
According to Georgieva, the IMF projects that increasing food import costs would result in a $9 billion shortfall in developing nations' balance of payments in 2022-2023.
"We took specifically to heart the issue of food. Why? Because you die when food is not available. This is not a trivial question. And we identified about $9 billion shortfall in terms of balance of payment coverage for this only, and now we are looking, of course, into the impact of energy on developing countries," she said during the joint discussion with Malpass.
The IMF has frequently warned that the global economic slowdown has accelerated in recent months and that certain nations will experience a recession next year.
The crisis in Ukraine, supply chain interruptions, challenges with gas and oil supplies from Russia to Europe, and other concerns are all harming global economic activity, according to the organization.