IMF warns worst is yet to come for world economy
The International Monetary Fund (IMF) has warned “the worst is yet to come” for the world economy as war in Ukraine continues and prices spiral. In its latest assessment of the global economy it said “for many people 2023 will feel like a recession”. The body, which works to stabilise the global economy, has downgraded its economic growth forecasts due to the impact of Russia’s Ukraine invasion. UK growth is set to grind to a near halt next year, growing by 0.3%. That marks a 0.2% downgrade from the IMF’s July forecast, and a sharp fall from the 3.6% rate of growth for the UK economy expected in 2022. The analysis by the influential financial institution does not, however, take into account the chancellor’s recent mini-budget. After Kwasi Kwarteng unveiled plans for huge tax cuts, the IMF criticised the government’s proposals warning that the measures are likely to fuel the cost-of-living crisis.
In an unusually outspoken statement, the IMF said the proposal was likely to increase inequality and add to pressures pushing up prices. The IMF works to stabilise the global economy and one of its key roles is to act as an early economic warning system. It said it understood the government’s package aimed to boost growth, but it said that the tax cuts could speed up the pace of price rises, which the UK’s central bank is trying to bring down.(BBC)…[+]