According to the IMF, the outlook for the global economy is rapidly darkening. It faces the "biggest test since the Second World War, IMF Managing Director Kristalina Georgieva warned. The Russia-Ukraine war and the continued fallout from the COVID-19 pandemic are the two main negative factors.
In her recent speech, she has stressed the world economy is going through "the biggest test since the Second World War" as it confronts a "potential confluence of calamities." Skyrocketing food and energy prices are eating out household incomes. Central banks are tightening monetary policy in an attempt to tame inflation, exerting further pressure on indebted nations, companies, and families.
"Tensions over trade, technology standards and security have been growing for many years, undermining growth – and trust in the current global economic system," Kristalina said.
Carmine Di Sibio, the Global Chairman and CEO of EY, expressed the same view. "The economy is the top conversation – inflation is a big concern and you do see some leading indicators starting to slow," he pinpointed. "The transformation that companies are going through – the transformation in terms of technology, in terms of supply chain and location of supply chain, and de-risking of supply chains – that is still going on and we do a lot around that as well," Di Sibio noted.