IMF trims global growth outlook as banking turmoil raises risk of hard landing

The International Monetary Fund on Tuesday cut its global growth outlook for the year, warning the world economy faces the increased risk of a "hard landing" due to continued fallout from a spate of bank failures, higher interest rates and stubborn inflation. 

The Washington-based institution said in its latest World Economic Outlook that global gross domestic product will grow by just 2.8% this year – which represents a 0.1 percentage point decline from its previous forecast in January – before rising to 3% in 2024.

"The major forces that affected the world in 2022… seem likely to continue into 2023," the report said. "But these forces are now overlaid by and interacting with new financial stability concerns. A hard landing – particularly for advanced economies – has become a much larger risk. Policymakers may face difficult trade-offs to bring sticky inflation down and maintain growth while also preserving financial stability."