Global economy tends to be sluggish after slowdown in manufacturing and services sector

According to the International Monetary Fund (IMF), the global economy is tending to develop more sluggishly than predicted by the IMF. The Purchasing Managers’ Index (PMI) has deteriorated in recent months.

According to the IMF, the global economic outlook is affected by tight monetary policies of central banks around the world, rising inflation across the board, slowdown in the Chinese economy, supply chain issues, and food insecurity.

In October, the IMF lowered its forecast for global economic growth in 2023 to 2.7% (previously 2.9%).

The IMF has published the data on its blog ahead of the G20 meeting in Indonesia. According to it, purchasing managers’ indexes for both manufacturing and services have slowed in most G20 countries, and some of them have even shrunk, while inflation has soared.

The IMF report also states that the worsening energy crisis in Europe will have a serious impact on economic growth and inflation. Persistently high inflation could prompt central banks to raise key interest rates more than expected.

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