The Director-General of the International Monetary Fund, Kristalina Georgieva, warned Monday of a “bleak outlook” for the global economy, during a seminar in Davos, but she ruled out a global recession.
“The year will be difficult,” Georgieva said during a seminar on global economic prospects, while the extent of the repercussions of the war in Ukraine was not yet clear.
“We are witnessing a shock in the prices of raw materials, especially food prices,” which is witnessing a historic jump, Georgieva said.
In April, the International Monetary Fund cut its global growth forecast to 3.6 percent for 2022 due to the repercussions of the war in Ukraine.
That represented a 0.8 percentage point drop from the January forecast.
Georgieva indicated that “the outlook has become bleak” following these expectations, and said that the economic repercussions of the closure measures in China exacerbated those resulting from the war, as well as the tightening of financial policies in a number of countries, including the United States, to confront the acceleration of inflation.
And the repercussions of the war might worsen yet, adding to the fears of a growing number of economic observers of a global downturn.
On Monday, the Organization for Economic Cooperation and Development, which includes developed countries, indicated that the Group of Seven countries recorded in the first quarter a decline of 0.1 percent in the growth rate.
And on Monday, Georgieva said that a global economic downturn is not on the horizon “currently, but this does not mean that it is not possible”, in response to a question regarding the risks of deflation in developed countries.
“We will see a downturn in some countries that have not recovered from the Covid crisis, which are highly dependent on Russia or on food imports, and are already showing weaknesses,” Georgieva said.