IMF: the global economy faces multiple downside risks
The IMF lowered global economic growth in 2022 by 0.8% to 3.6%. The economy faces multiple uncertainties, and the overall risk is biased downward:
The conflict in Russia escalated. If trade sanctions expand, they will exacerbate supply risks or push up global commodity prices and inflationary pressures. If Russia defaults on its debt, it will impact the global financial market and lead to the repricing of emerging market risks.
Social unrest has intensified. Rising energy and food prices, developing countries that are highly dependent on imports and have limited fiscal space may cause livelihood problems. The influx of refugees in Europe may trigger a humanitarian crisis and exacerbate social conflicts.
The global epidemic has relapsed again. Although the global epidemic situation has improved, it is still recurring in some areas. If a mutated virus with high transmission rate and high mortality rate appears in the future, it may cause serious impact again.
China's economy slowed further. If the expansion of the epidemic in China leads to the upgrading of prevention and control, it may have an impact on the global supply chain. The slowdown in business activities may have a linkage impact on the economy outside China.
Medium term inflation expectations continued to rise. Although short-term inflation has risen sharply, the market expects medium-term inflation to gradually fall. If the wage price spiral pushes up long-term inflation expectations, monetary policy may need to accelerate tightening and increase economic pressure.
High interest rates raise debt risk. The unconventional recovery policy after the epidemic has pushed up the scale of global public debt. The tightening of monetary policy pushed up interest rates, induced capital outflows from emerging markets, and led to the risk of default in low - and middle-income countries with heavy debt burden.
The global geopolitical environment has deteriorated. The international cooperation system established after World War II faces the risk of differentiation, which may aggravate political polarization, slow down scientific and technological progress, upgrade trade barriers and damage long-term prosperity
