IMF Slashes Global Economic Forecast

Photo: EPA/Shutterstock [via The New York Times]

The Facts

  • In its bi-annual World Economic Outlook published Tuesday, the Washington-based International Monetary Fund (IMF) warned that a third of the world's economy would face a recession next year and advised central banks to "stay the course" in raising interest rates.

  • The IMF reduced its 2.9% global growth forecast from July to just 2.7%, though it remains at 3.2% for 2022. According to IMF chief economist Pierre-Olivier Gourinchas, the world's three largest economies — the US, China, and the eurozone — "will continue to stall" in 2023.


The Spin

Republican narrative

Despite Biden's claims that he's leading the US through this historically turbulent economic period, Americans are facing a looming recession, inflation at a four-decade high, and the impending loss of tens of thousands of jobs. The Fed is now pushing up interest rates at the cost of US labor markets to tackle the result of Democratic overspending policies — evidence that Biden's tenure is an abject failure.

Democratic narrative

Economic decline and a looming recession aren't specific to the US; they're hitting nations across the globe as a result of geopolitical instability caused by the war in Ukraine and the ongoing recovery from the pandemic. The Fed's aggressive response to inflation is adding to global pressures, but central banks — and politicians — have been put in an impossible position. A single political party cannot be held responsible for this situation.

Nerd narrative

There's a 6% chance that the first US recession before 2032 will lead to a depression, according to the Metaculus prediction community.


Political split

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RIGHT

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