The International Monetary Fund (IMF) has revised their World Economic Outlook, lowering global growth for 2022 from 4.4% down to 3.6%. This forecast projects a downwards economic trend for 86% of its 190 member countries, a significant increase in projected inflation alongside risks of greater uncertainty. The focus of the relatively large size of revisions points at the ripple effects of Russia’s invasion of Ukraine – which have disrupted supplies of corn, gas, metals and oil and wheat whilst pushing up prices of critical factors of production such as fertiliser; raising concerns of a looming global food crisis and increase in world hunger.
IMF’s downward revision in the global economic growth for 2022 is not offsetted in 2023, instead continuing to decrease from 3.8% to 3.6%. Three developments are to blame: changing nature of globalisation, reliance on artificial growth boosters and failure to invest in long-term sources of sustained growth. Emerging complications in globalisation have made it difficult for nations to leverage international trade and foreign investment for domestic growth. These developments have coincided with a period of low productivity growth, a result of failing to invest into drivers of genuine long-term growth such as infrastructure and human capital.
