IMF World Forecast July 2022

The International Monetary Fund released its World Economic Outlook on July 26, 2022. The report forecasts global growth this year at 3.2%, slowing further to a GDP rate of 2.9% in 2023. These revisions represent a downgrade of 0.4 percentage points and 0.7 percentage points, respectively, over the April projections.

Several shocks have hit the global economy: increased inflation, especially in the US and major European economies, triggering tighter financial conditions, a significant contraction in the growth of the Chinese economy, linked to new outbreaks and lockdowns, as well as the consequences of the war in Ukraine.

IMF lowered the 2022 GDP forecast of the United States by 1.4 percentage points, from 3.7% to 2.3%. Other advanced economies are also expected to slow down their growth: IMF revised the projections for Germany (from 2.1% to 1.2%), Spain (from 4.8% to 4%), the United Kingdom (from 3.7% to 3.2%), Japan (from 2.4% to 1.7%), and Canada (from 3.9% to 3.4%). Italy’s 2022 growth outlook is revised up by 0.7 percentage points (from 2.3 to 3%). Italy is the only G7 country with a growth forecast for 2022.

The 2022 forecast downgrade also reflects revisions among a few large emerging markets. The Chinese economy is expected to grow 3.3% in 2022, 1.1 percentage points less than previously expected. India’s forecast was cut by 0.8 percentage points to 7.4%, while for the largest five ASEAN economies (Indonesia, Malaysia, Philippines, Thailand, and Vietnam), the growth remains stable at 5.3%.