IMF LOWERS ECONOMIC GROWTH FORECAST

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The IMF has revised down its forecast on global economic growth for this year. The main reason is the fallout from Russia’s invasion of Ukraine. South Korea’s growth outlook has also been also slashed to 2.5%.

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The IMF expects the global economy to grow 3.6% this year. It’s down by 0.8 percentage points from its January forecast. As for South Korea, the IMF cut its growth outlook by half a percentage point to 2.5%. Growth projections have been downgraded for most countries. The outlook for the U.S. is down 0.3 percentage points, 1.1 for the Eurozone and 0.4 for China. Russia and Ukraine are expected to post negative growth this year at minus 8.5 and minus 35 percent, respectively. The IMF said supply chain disruptions and inflation have intensified due to the war in Ukraine. It said global growth could slow even more with diminished policy support and further lockdowns in China. The IMF urged governments to carry out policies catering to each country’s situation. It stressed that monetary tightening is required to tame inflation but fine-tuned measures are also necessary to boost recovery. The IMF especially cautioned against dialing back resources for the socially vulnerable amid high inflation. It also raised its inflation outlook for South Korea to 4% this year, 0.9 percentage points higher than its earlier forecast.