IMF slashes global growth forecast to 3.6 per cent

The International Monetary Fund (IMF) on Tuesday slashed the global growth forecast to 3.6% this year, down by 0.8% from January amid Russia-Ukraine war. The IMF blamed Russia’s war in Ukraine for disrupting global commerce, pushing up oil prices, threatening food supplies and increasing uncertainty already heightened by the coronavirus and its variants.  The IMF said the Ukraine war is pushing inflation higher globally, and will last ‘much longer’ than previously expected. The IMF also predicted that the Ukraine economy will collapse to 35% this year and Russia to fall to 8.5%. The IMF has also slashed the growth forecast for India for the current financial year by 80 basis points to 8.2 per cent, saying that the ongoing Russia-Ukraine war will in the long run hurt consumption and also growth as inflation will rise. The IMF also said it expects the world economy to grow 3.6% again next year, slightly slower than the 3.8% it forecast in January. 

"The economic effects of the war are spreading far and wide -- like seismic waves that emanate from the epicenter of an earthquake," IMF chief economist Pierre-Olivier Gourinchas said in the report. European nations will see much slower growth as the war drives up fuel and food prices, pushing inflation higher and keeping it there for longer than expected, which will harm countries worldwide, especially emerging and developing nations. The United States and China also will feel the effects of the war and the ongoing impact of the Covid-19 pandemic, with US growth expected to slow to 3.7 percent, and China's to 4.4 percent.