The International Monetary Fund (IMF) has downgraded global growth outlook, warning that the world economy is moving toward a more adverse scenario due to rising energy prices.
The downgrade is driven by:
- Ongoing conflict disrupting global oil supply
- Oil price projections rising to USD100–125/barrel
- Inflation pressures increasing across major economies
IMF outlined 3 scenarios:
- Base: moderate growth with stable conditions
- Adverse: prolonged conflict and slower growth
- Severe: global recession with high inflation
Business Impact:
- Rising operating costs globally
- Reduced global demand for goods and services
- Increased uncertainty in investment decisions
Economic Impact:
- Growth slowdown in US, Europe, and emerging markets
- Inflation may exceed 6% in worst-case scenario
- Central banks face difficulty balancing policy
Macroeconomic Effect:
- Risk of global recession increases
- Governments may reduce subsidies and shift to targeted support
- Financial markets become more volatile
