Taken from Diario Libre
SANTO DOMINGO– The International Monetary Fund (IMF) lowered its growth projection for the Dominican economy in 2022 to 5.3%, down from the 5.5% it had announced in April of this year. It also reduced its forecast for 2023 to 4.5%, down from the 5.0% projected that month.
Based on projections of real gross domestic product (GDP) for various economies, the IMF also revised its forecast for Haiti to negative. From the 0.3% growth it indicated in April for this year, in the "World Economic Outlook" report published at that time, it now projects -1.2%.
The outlook for that country in 2023 was lowered from the 1.4% it estimated in April to 0.5%.
In the region and the world
The IMF 's new forecasts are contained in its latest "World Economic Outlook" report for October - published yesterday in Washington - which projects that Latin America will grow more than the average this year, but will suffer in 2023.
Globally, the IMF forecasts that the global economy will slow more than expected in 2023. According to the international organization's calculations, global growth will decelerate from 6.0% in 2021 to 3.2% in 2022 and 2.7% in 2023.
“More than a third of the global economy will contract this year and next, while the three largest economies—the United States, the European Union, and China—will continue to stagnate. Simply put, the worst is yet to come, and for many people, 2023 will feel like a year of recession,” the IMF.
In the Dominican Republic, after reporting a growth of 12.3% in 2021, a year in which the economic outlook began to recover from the pandemic-stricken 2020, the Central Bank reported that the country's economy registered an increase of 5.4% in August, maintaining an average growth of 5.5% in the first eight months of 2022.
The governing body of local monetary policy maintained that the performance of the period places the projection of real gross domestic product (GDP) expansion for the end of 2022 in the range of 5.0-5.5%, around its potential rate.
“Global economic activity is experiencing a widespread and more pronounced slowdown than anticipated, with the highest inflation recorded in several decades,” the IMF highlights in its recent report.
“The cost of living crisis,” he adds, “the tightening of financial conditions in most regions, the Russian invasion of Ukraine, and the persistence of the COVID-19 pandemic are significantly impacting the outlook.”.
Inflationary environment
Regarding inflation, the IMF forecasts that global inflation will increase from 4.7% in 2021 to 8.8% in 2022, before falling to 6.5% in 2023 and 4.1% in 2024.
“In emerging markets, rising interest rates, weak economic fundamentals and significant capital outflows have pushed up borrowing costs, particularly in pre-emerging economies, with a high risk of further defaults,” the IMF in its “Global Financial Stability Report,” also published yesterday.
The organization believes that authorities should focus on restoring price stability and easing pressures on the cost of living. Furthermore, it maintains that multilateral cooperation remains essential to accelerate the transition to green energy and prevent fragmentation.
“The future health of the global economy depends fundamentally on the proper calibration of monetary policy, the course of the war in Ukraine, and the possibility of new supply-side shocks related to the pandemic, such as in China,” he says.
