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International Monetary Fund 2022: The International Monetary Fund is a financial agency of the United Nations (UN), and it is also an international financial institution, headquartered in Washington, D.C.The IMF consists of 190 countries.
The aim of this agency is to “work to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment, sustainably economic growth, and reduce poverty around the world.” The IMF was formed in 1944 and it came into formal existence in December 1945.
The IMF publish two reports:
1. World Economic Outlook Report
2. The Global Financial Stability Report
The World Economic Outlook Report is the survey report of the International Monetary fund IMF which forecasts global economic developments during the near and medium term. The report is usually published twice a year, in the months of April and October.
Highlights of the report for 2022:
- World growth is forecast to slow from 6% in 2021 to 3.2% in 2022 and 2.7% in 2023. This is the weakest growth forecast since 2001, except for the global financial crisis and the acute phase of the COVID-19 pandemic.
- World growth is expected to slow further in 2023, and for many people, 2023 will look like a recession.
- China is projected to hit its lowest rate in decades.
- It cuts its forecast for India’s Gross Domestic Product (GDP) growth in 2022 to 6.8% from 7.4% for India in the fiscal year that started in April 2022.
- It is projected that India will grow by 6.1 percent in 2023.
International Monetary Fund 2022: Inflation
- World inflation is forecast to rise from 4.7% in 2021 to 8.8% in 2022 but to decline to 6.5% in 2023 and to 4.1% in 2024.
- The slowdown in global economic activity is broad-based and sharper-than-expected, with inflation higher than seen in decades.The outlook depends on the successful calibration of monetary and fiscal policies, the course of the war in Ukraine, and the growth prospects in China.
Recommendations of the Indian Monetary Fund (IMF)
Increase in prices:
- The priority must be to tackle inflation, normalize central bank balance sheets, and raise real policy rates above their neutral level fast enough and for long enough to keep inflation and inflation expectations under control.
Fiscal policy and monetary coordination
- Fiscal policy also needs to support money policies in softening demand in economies with access to aggregate demand and overheating labor markets.
- Without price stability, any grains from future growth are at risk of being eaten up by a renewed cost-of-living squeeze.
- The central bank needs to act strongly while communicating the objectives and steps to achieve them.
The cost of living is increasing faster. Policymakers will need to protect the most vulnerable members of society from the impact of higher prices.