Global Slowdown Expected

The International Monetary Fund (IMF) released their outlook for world economies on October 11. Below is a synopsis of their observations.

• Slowdown is “broad-based and sharper-than-expected”
• Growth will slow – 3.2% in 2022 and 2.7% in 2023
• IMF says this is the weakest world growth since 2001
• Inflation should decline to 6.5% in 2023 and 4.1% 2024

According to IMF chief economist, Pierre-Oliver Gourinchas, “the three largest economies (U.S., China and Euro area) will continue to stall. In short, the worst is yet to come, and for many people, 2023 will feel like a recession.”

The IMF believes these forecasts could be optimistic if central banks overtighten. It could result in financial market volatility and difficulty for emerging markets. Other risks may include:

• A sharp rise in oil prices
• Steep decline in Chinese property
• Currency depreciation
• Overheating of labor markets
• Strong dollar impact on emerging economies

Whether or not the forecasts come to fruition, there is little doubt we are in for some difficult times. It is a good time to review how your finances are set-up and to make sure you have your emergency fund replenished.