The International Monetary Fund (IMF) has lowered its 2023 global growth forecast.
The IMF's World Economic Outlook report forecasts global growth of 2.8% in 2023, down from the 2.9% projection the fund made in January.
- High inflation, interest rate hikes in major economies, the war in Ukraine, and the lingering effects of the COVID-19 pandemic are dampening global growth.
- The global economy is forecast to grow at an average annual rate of ~3% over the next five years ― the worst medium-term growth projection the IMF has made since 1990.
- Trouble in the banking sector could undermine global growth if credit conditions continue to tighten.
- Banks' business models largely assumed that low-interest rates would continue, making them vulnerable to rising rates and a possible credit crunch.
- Tightening credit conditions could worsen the problem of unrealized losses at banks, potentially having a "significant impact on the global economy."
