IMF predicts five years of sluggish global economic growth ahead in US 2023

The global economic recovery from the pandemic is losing steam, and a major reason can be found on the battlefields of Ukraine.

Key TakeAways

• The Russian invasion of Ukraine has taken a toll on global gross domestic product (GDP).
• The International Monetary Fund estimates that the war will continue to drag down the global economy for the next five years.
• An IMF official said the fight undermines the argument for peace and continued globalization. {alertSuccess}

Global GDP will grow "about 3%" for the next five years, Kristalina Georgieva, managing director of the International Monetary Fund (IMF), said in a speech in Washington on Thursday.

That's a decline from previous forecasts, the worst medium-term outlook since 1990 and below the 3.8% average over the past 20 years, she said.

The forecast of sluggish growth highlights how much the Russian invasion of Ukraine has set back the world's economic recovery from the pandemic. The war disrupted the supply of oil, natural gas, fertilizer and other vital materials, contributing to inflation in many countries. Georgieva blamed the invasion and its far-reaching consequences for affecting economic growth, which is slated to slow to 3.4% in 2022 from 6.1% a year earlier.
Georgieva said the results of the invasion underscore the need for international cooperation to avoid future wars.

" This disaster not only kills innocent people; It also worsens the cost-of-living crisis and brings about more hunger around the world," she said. "It risks erasing the peace dividend we have enjoyed for the past three decades, also driving friction in trade and finance adds up."

He called on governments to resist walling themselves off into competing economic blocs, citing IMF research which estimated that the potential fragmentation of trade could reduce global growth by up to 7%.