The International Monetary Fund is altering its expectations for global economic growth and inflation in 2023.

During a recent press conference, the United Nation’s financial agency said it expects the world’s economy to grow by 2.9 per cent and the overall inflation rate to reach seven per cent this year. In January, it predicted the annual global growth would reach 2.9 per cent and inflation would reach 6.6 per cent.

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During the conference, Pierre-Olivier Gourinchas, chief economist of the IMF, said rising interest rates in the world’s wealthiest countries could weaken growth enough to cause a global recession. “The situation remains fragile. Downside risks predominate.”

The organization’s latest figures also suggest there’s a 25 per cent chance that global growth will fall below two per cent and a 15 per cent chance the global economy could shrink during the year. Global growth has only fallen below two per cent five times since 1961, while negative growth has been experienced twice in the same period, in 2009 and 2020.

The IMF also downgraded its growth expectations for the U.S. to 1.6 per cent. At the beginning of the year, it predicted the world’s largest economy would grow by 1.6 per cent. Its position on U.K. growth improved slightly, with the economy now expected to shrink by 0.3 per cent rather than 0.6 per cent.

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