Citing Russia's war, IMF cuts global growth forecast to 3.6 per cent

Washington, Apr 19 (AP) International Monetary Fund on Tuesday downgred outlook for world economy this year and next, blaming Russia's war in Ukraine for disrupting global commerce, pushing up oil prices, threatening food supplies and increasing uncertainty alrey heightened by coronavirus and its variants.

190-country lender cut its forecast for global growth to 3.6 per cent this year, a steep falloff from 6.1 per cent last year and from 4.4 per cent growth it h expected for 2022 back in January.

It also said it expects world economy to grow 3.6 per cent again next year, slightly slower than 3.8 per cent it forecast in January.

war — and darkening outlook — came just as global economy appeared to be shaking off impact of highly infectious omicron variant.

“ war will slow economic growth and increase inflation," IMF chief economist Pierre-Olivier Gourinchas told reporters on Tuesday.

Now, IMF expects Russia's economy — battered by sanctions — to shrink 8.5 per cent this year and Ukraine's 35 per cent.

U.S. economic growth is expected to drop to 3.7 per cent this year from 5.7 per cent in 2021, which h been fastest growth since 1984. new forecast marks a downgre from 4 per cent IMF h predicted at beginning of year.

Hobbling U.S. growth this year will be Federal Reserve interest rate increases, meant to combat resurgent inflation, and an economic slowdown in key American tring partners.

Europe, heavily dependent on Russian energy, will bear brunt of economic fallout from Russia-Ukraine war. For 19 countries that share euro currency, IMF forecasts collective growth of 2.8 per cent in 2022, down sharply from 3.9 per cent it expected in January and from 5.3 per cent last year.

IMF expects growth of Chinese economy, world's second biggest, to decelerate to 4.4 per cent this year from 8.1 per cent in 2021. Beijing's zero-COVID strategy has meant draconian lockdowns in bustling commercial cities like Shanghai and Shenzhen.

Some commodity-exporting countries, benefiting from rising price of raw materials, are likely to defy trend toward slower growth. For example, IMF raised its growth forecast for oil producer Nigeria — to 3.4 per cent this year from 2.7 per cent fund said it expected back in January.

world economy h bounced back with surprising strength from 2020's brief but brutal coronavirus recession. But rebound presented problems of its own: Caught by surprise, businesses scrambled to meet a surge in customer orders, which overwhelmed factories, ports and freight yards. result: long shipping delays and higher prices.

IMF forecasts a 5.7 per cent jump in consumer prices in world's vanced economies this year, most since 1984. In United States, inflation is running at a four-dece high.

Central banks are raising interest rates to counter rising prices, a move that could choke off economic growth. By driving up prices of oil, natural gas and or commodities, Russia-Ukraine war has me ir task of fighting inflation while preserving economic recovery even trickier.

conflict also has “triggered biggest refugee crisis in Europe since World War II,'' IMF noted, and cut supplies and raised prices of fertilizer and grain produced in Russia and Ukraine, threatening food security in Africa and in Middle East. In a speech last week, IMF managing director Kristalina Georgieva warned of threat of “more hunger, more poverty and more social unrest.'' (AP) CPS