The International Monetary Fund cut its expectations for global growth over the next two years. Now the world economy is expected to grow by 3.6% in both 2022 and 2023, a sharp deceleration from a 6.1% expansion in 2021.
“The economic effects of the war are spreading far and wide,” the organization said in its latest outlook.
“Global economic prospects have been severely set back, largely because of Russia’s invasion of Ukraine,” noted Pierre-Olivier Gourinchas, economic counsellor at the IMF.
According to the IMF the damage that Russia’s invasion of Ukraine has caused to the global economy pales compared to the blow on Ukraine, and to a lesser extent that of Russia. While Russia’s GDP is estimated to fall by 8.5% this year, the Ukrainian economy is expected to contract by 35%.
The IMF forecast came a day before the World Bank also reduced its global expectations, now estimating a growth rate for 2022 of 3.2%, down from 4.1%.
According to Reuters, World Bank President David Malpass told reporters the bank is preparing for a continued crisis response. “Over the next few weeks, I expect to discuss with our board, a new 15-month crisis response envelope of around $170 billion to cover April 2022 through June 2023,” he said.