Banking crisis adds to global economic turmoil- IMF

The International Monetary Fund (IMF) forecasts the 2023 global economic growth would fall to 2.8 percent from 3.4 percent in 2022, as the economy facing the impacts of banking crises changed its predictions, an IMF report read on Tuesday.

“Uncertainty is high, and the balance of risks has shifted firmly to the downside so long as the financial sector remains unsettled,” the IMF said in the report.

The global economy has already been dealing with the impacts of soaring inflation and the increase of interest rates to curb it, high debt levels and the Russian-Ukrainian war, with the recently added banking turmoil.

The IMF also predicts that the global inflation rates will likely fall from 8.7 percent in 2022 to seven percent in 2023 and to 4.9 percent in 2024.

“Financial conditions have tightened, which is likely to entail lower lending and activity if they persist,” the IMF added.

The IMF put a worst-case scenario if the world faces another financial crisis, the global growth rate could fall to one percent.