WASHINGTON – The global economic outlook is even gloomier than projected in October, the International Monetary Fund (IMF) said on Sunday, citing a steady worsening in purchasing manager surveys in recent months.

It blamed the darker outlook on tightening monetary policy triggered by persistently high and broad-based inflation, weak growth momentum in China, and ongoing supply disruptions and food insecurity caused by Russia’s invasion of Ukraine.

The global lender in October cut its global growth forecast for 2023 to 2.7 per cent from a previous forecast of 2.9 per cent.

In a blog prepared for a Group of 20 (G-20) leaders’ summit in Indonesia, the IMF said recent high-frequency indicators “confirm that the outlook is gloomier”, particularly in Europe.

It said purchasing manager indices that gauge manufacturing and services activity signalled weakness in most G-20 major economies, with economic activity set to contract while inflation remained high.

“Readings for a growing share of G-20 countries have fallen from expansionary territory earlier this year to levels that signal contraction,” the IMF said, adding that global fragmentation added to “a confluence of downside risks”.

“The challenges that the global economy is facing are immense and weakening economic indicators point to further challenges ahead,” the IMF said, adding that the current policy environment was “unusually uncertain”.

A worsening energy crisis in Europe would severely harm growth and raise inflation, while prolonged high inflation could prompt larger-than-anticipated policy interest hikes and further tightening of global financial conditions. That in turn posed “increasing risks of a sovereign debt crisis for vulnerable economies”, the IMF said.

Increasingly severe weather events would also harm growth across the globe, it said. REUTERS