The I.M.F. warns that a global recession could soon be at hand.

[Celerity]

The International Monetary Fund downgraded its growth forecasts and projected higher inflation around the world.

https://www.nytimes.com/2022/07/26/business/imf-world-economy.html

https://archive.ph/Q02oL



The world could soon be on the brink of a global recession as the economies of the United States, China and Europe slow more sharply than anticipated amid a collision of crises, the International Monetary Fund warned on Tuesday. In an update of the World Economic Outlook, the I.M.F. said economic prospects had darkened significantly in recent months as war in Ukraine, inflation and a resurgent pandemic inflicted pain on every continent. If the thicket of threats continues to intensify, the world economy faces one of its weakest years since 1970, a period of intense stagflation across the globe.

“The world may soon be teetering on the edge of a global recession, only two years after the last one,” Pierre-Olivier Gourinchas, the I.M.F.’s chief economist, wrote in a blog post accompanying the report. Put simply, the outlook for the global economy is “increasingly gloomy,” he wrote. The I.M.F. downgraded its global growth forecasts from its April projections, predicting that output will fall to 3.2 percent in 2022, from 6.1 percent last year. Growth is expected to slow even further next year as central banks around the world raise interest rates in an effort to tame inflation by cooling their economies.

Inflation is also rising more rapidly and broadly than the I.M.F. anticipated earlier this year. It now expects prices to rise 6.6 percent in rich countries and 9.5 percent in emerging markets and developing economies. The international group also warned of another problem that could emerge as the Fed raises interest rates. Higher rates are expected to further strengthen the U.S. dollar as investors plow into Treasury bonds that offer lucrative returns. The I.M.F. said inflation in emerging markets could be amplified as the appreciation of the dollar made the imports that they bought with their local currencies more expensive.

Poor countries are already struggling to cope with a food crisis, as exports of grains and cooking oils from Russia and Ukraine have been disrupted by the war, fueling a surge in food costs and raising fears about the prospects of famine and social unrest. “The risks to the outlook are overwhelmingly tilted to the downside,” the I.M.F. said. The economic storm facing the world is the result of diminished consumer spending power in the United States, the impact of Russia’s invasion of Ukraine on Europe’s economies, and the property crisis and lockdowns in China, where Beijing continues to take severe measures to contain coronavirus outbreaks.

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[czarjak]

1. Those Secret Societies are gonna kill us all someday. They swore to it!

[Initech]

3. Branson, Musk, and Bezos better be glad we're not planning a revolution.

At least not yet.