In a report released Tuesday, the International Monetary Fund once again lowered its world economic forecast as it predicted major slowdowns in the three biggest economies: the United States, China and Europe.
The IMF now expects the world economy to grow just 3.2% this year, down from 6.1% in 2021.
Next year is thought to be even worse: just 2.9%, only slightly above the 2.5% growth level that the IMF has typically considered a global recession.
That scenario, the IMF warned, could prompt an official recession next year, causing global growth to tumble further to just 2%. That level of anemic growth has happened just five times since 1970, the IMF said.
Now, “the outlook has darkened significantly,” Pierre-Olivier Gourinchas, the IMF’s director of research, wrote in a blog post Tuesday. “The world may soon be teetering on the edge of a global recession, only two years after the last one.”
The world’s top three economies are all facing stalled activity.
In Europe, the cost of Russia’s invasion of Ukraine has been higher than anticipated, with the spike in energy prices, “weaker consumer confidence, and slower momentum in manufacturing resulting from persistent supply chain disruptions,” the IMF said.
— CNN Business’ Julia Horowitz contributed this report