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The global economy may soon be teetering on the edge of a recession, IMF says

The global economy is facing the possibility of a severe downturn that would rank in the bottom 10% of outcomes since 1970, the International Monetary Fund warned Tuesday in an update to its closely-followed World Economic Outlook report.

“The outlook has darkened significantly April. The world may soon be teetering on the edge of a global recession” said Pierre-Olivier Gourinchas, the IMF’s chief economist, in a blog post accompanying the report.

The IMF said global output contracted in April-June quarter owing to downturns in China and Russia while U.S. consumer spending “undershot” expectations.

The global economy is reeling from the war in Ukraine, COVID-lockdowns in China, and soaring inflation pressures in the United States and Europe.

The IMF trimmed its baseline forecast for global economic growth to 3.2% in 2022, 0.4 percentage point lower than in the April report. In 2023, the…

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