The International Monetary Fund or IMF recently released its World Economic Outlook update for this month, which suggests that 2022 has been “gloomy and more uncertain.”
The IMF’s pessimistic view suggests the possibility that digital asset markets would continue to suffer. It said that “Several shocks have hit a world economy already weakened by the pandemic.”
A pandemic-ravaged global economy that has not had a chance to recover has been made worse by Russia’s war in Ukraine and the ensuing supply chain problems. Notably, this is not a piece of very good news for high-risk asset classes such as digital assets.
IMF sees a global recession ahead
The IMF report states that growth is expected to slow from 6.1 percent last year to 3.2 percent in 2022. In 2022, several nations’ economies will slow, plunging them into recession. The issues have worsened by decreased household purchasing power brought on by inflation and stricter monetary policies.
According to the report, these problems would probably persist through 2023. It stated:
“The risk of recession is particularly prominent in 2023 when in several economies growth is expected to bottom out.”
As TheCoinRise reported, the IMF noted in the same report that the “dramatic selloff” (due to Terra ecosystem collapse) in the crypto market has affected crypto investment vehicles and hedge funds (runs on crypto lenders and brokers like Celsius, Voyager Digital, Three Arrows Capital, and BlockFi). However, IMF believes that “spillovers to the broader financial system have been limited so far.”
This week will clear all the clouds
Notably, the US Bureau of Economic Analysis (BEA) will publish its preliminary estimate of second-quarter GDP this week. A result of -1.6 percent is the prediction according to the Atlanta Fed, which is the same fall as the previous quarter.
A recession occurs when two consecutive quarters of negative GDP growth. However, American politicians are already attempting to avoid using this term by modifying its definition and downplaying the likelihood of a recession.
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