The IMF on Tuesday maintained this year's world GDP growth projection at 3.2%, but cut by 0.2 percentage points (pp.) that of 2023 to 2.7%, with a 25% probability of falling below 2%.

In its economic projections update, released yesterday, the International Monetary Fund (IMF) estimates that more than a third of the global economy will contract this year or next, while the three largest economies - the United States, the European Union, and China - will continue to stagnate.

"The worst is yet to come, and for many people 2023 will look like a recession," warns Pierre-Olivier Gourinchas, the institution's chief economist, in the report quoted by Lusa.

The IMF warns that the world faces a volatile period, both economically, geopolitically and environmentally, impacting the global outlook, highlighting in particular the consequences of the war in Ukraine.

Still, it keeps the global growth outlook for this year unchanged from the estimates released in July, but revises downward those for next year, still being significantly more than projected in April.

"Forecasts are weaker than expected for 143 economies for 2023. The forecast for 2023 is the weakest since the 2.5% growth rate seen during the 2001 global slowdown - except for those during the financial and Covid-19 crises," it states.

The IMF improved this year's forecast for the euro zone by 0.5 pp. to 3.11 Q2T, compared to July, but cut the 2023 forecast by 0.7 pp. to 0.51 Q2T.

The slowdown in growth will also be felt in the United States, with the Bretton Woods organization having revised down 0.7 pp. its forecast for the latter to 1.6%, estimating an expansion next year of 1%.

For China, meanwhile, it anticipates GDP growth of 3.2% this year and 4.4% in 2023, 0.1 pp. less and 0.2 pp. less, respectively, than before.

Despite the scenario, the IMF notes that "a decline in global GDP or global GDP per capita - which often happens when there is a recession - is not currently in the baseline forecast."

However, it admits to a technical recession (at least two consecutive quarters with a contraction in real GDP) sometime during 2022-23 in about 43% of the economies with quarterly data forecasts (31 of 72 economies), representing more than one-third world GDP.

The IMF notes that downside risks to the outlook remain elevated, considering that "the risk of monetary, fiscal or financial policy calibration errors has increased markedly at a time when the world economy remains historically fragile and financial markets are showing signs of stress."