The IMF has warned that we are on the precipice of a global recession as it revises down its growth outlook. The latest World Economic Outlook forecasts slowing growth, due to a number of challenges impacting the global economy. Pierre-Olivier Gourinchas, the chief economist at IMF said that economies around the world should brace for a slowdown noting, “The outlook has darkened significantly since April. The world will soon be teetering on the edge of a global recession, only two years after the last one.”
The IMF has lowered its expectations by 0.4%, taking its overall growth forecast to 3.2% for the year.
The Outlook adopts a cautious tone, noting “The risks to the outlook are overwhelmingly tilted to the downside. The war in Ukraine could lead to a sudden stop of European gas imports from Russia; inflation could be harder to bring down than anticipated either if labour markets are tighter than expected or inflation expectations unanchor; tighter global financial conditions could induce debt distress in emerging market and developing economies.
The forecast into next year paints a similar picture, with the report saying, “Global inflation … is anticipated to reach 6.6 percent in advanced economies and 9.5 percent in emerging market and developing economies this year—upward revisions of 0.9 and 0.8 percentage points, respectively. In 2023, disinflationary monetary policy is expected to bite, with global output growing by just 2.9 percent.”
Amidst the storm clouds of recession, gold is a historical safe haven offering a steady store of wealth. Couple this forecast with the knowledge that gold is currently undervalued and there is no better time to buy. Act now.
