IMF sees ‘gloomier’ world economic outlook

ISTANBUL

The global economic outlook is "gloomier" due to the Russia-Ukraine war, interest rate increases and pandemic's ongoing effects, an IMF economist said.


Tryggvi Gudmundsson, an economist at the IMF’s Research Department, said that there is a “steady worsening” in recent months for purchasing manager indices (PMI).


"While gross domestic product releases for the third quarter surprised on the upside in some major economies, October PMI releases point to weakness in the fourth quarter, particularly in Europe," Gudmundsson added.

He said China's pandemic lockdowns and its struggling real estate sector are contributing to a slowdown in investments, industrial production, and retail sales.

"This will inevitably have a significant impact on other economies due to China’s large role in trade," the economist said.

Tightening fiscal and monetary policies to lower inflation rates will continue to weigh on economic activity, he underlined.

Gudmundsson said: "The challenges that the global economy is facing are immense and weakening economic indicators point to further challenges ahead.

"However, with careful policy action and joint multilateral efforts, the world can move toward stronger and more inclusive growth."