The International Monetary Fund has cautioned that the UK is likely to experience the weakest growth among the G7’s biggest nations in 2019.
In comparison to its April forecast of 1.2 percent, it now forecasts UK growth of 0.5 percent in 2023.
According to the IMF, the world economy has contracted for the first time since 2020 as a result of the conflict in Ukraine and COVID-19.
The world “may soon be teetering on the edge of a global recession” as GDP slows down in the UK, US, China, and Europe, it warned.
The IMF has lowered its projection for global GDP in 2022 to only 3.2% and issued a warning that the decline could become even more severe.
According to the IMF, the global economy shrank in the three months leading up to July, marking the first decline since the pandemic began.
In the G7 economies—Canada, France, Germany, Italy, Japan, the US, and the UK—the likelihood of a recession is currently over 15%, nearly four times higher than average.
In 2022, the US experienced the most decline of any nation. The IMF reduced its growth projection for the world’s largest economy from 3.7 percent to 2.3 percent this year and to just 1 percent in 2023.
Meanwhile, as the country struggles with additional COVID lockdowns and a property crisis, China’s growth is expected to fall to 3.3 percent this year, the lowest rate in more than four decades.
Risks to the global economy in the coming months include concerns about the dependability of Russia’s natural gas supply to Europe and political upheaval brought on by high food and fuel costs, according to the IMF.
According to Mr. Gourinchas, “we may be relatively optimistic that China might be rebounding,” but he added that he was “far more concerned about both the inflation trend and the tightening of monetary policy leading to a slowdown going forward.”
It stated that in a “plausible” scenario, in which only some of those risks materialise, such as the cessation of Russian gas flows to Europe, global economic growth could fall to 2 percent next year. Since 1970, the world has only experienced growth below this level five times.