WASHINGTON: The International Monetary Fund on Tuesday downgraded its 2023 world economic outlook, citing Russia’s ongoing war against Ukraine, widespread inflationary pressures and higher interest rates boosting borrowing rates for both businesses and consumers.

The 190-nation lending agency said it expects a meager 2.7% global growth rate next year, down from the 2.9% it projected in July. The IMF left its 2022 prediction unchanged, a modest 3.2% figure that would be only slightly more than half of last year’s 6% growth.

Aside from the peak of the COVID-19 pandemic in 2020, the IMF said it is “the weakest growth profile since 2001.The worst is yet to come, and for many people, 2023 will feel like a recession.”

More than a third of the global economy will see two consecutive quarters of negative growth in the coming year, the IMF predicted.

The downturn in the IMF forecast was no surprise. Growth is slowing in the world’s two biggest economies, the United States and China, while key economies in Europe are also facing economic headwinds. Russia is coping with debilitating sanctions imposed by the U.S. and its Western allies for its war against Ukraine, now in its eighth month.

IMF Managing Director Kristalina Georgieva, speaking as the IMF and the World Bank meet in Washington, warned that the “risks of recession are rising” around the world and that the global economy is facing a “period of historic fragility.”

With economic uncertainty and rapid consumer price increases in the U.S., the IMF cut its predicted growth for the American economy to 1.6% this year, down from the July projection of 2.3%. The IMF said it is expecting only 1% U.S. growth next year.

Throughout the world, the IMF is expecting consumer prices to increase by 8.8% this year, up from 4.7% in 2021.

The IMF said it foresees 3.2% growth in China this year, down sharply from 8.1% last year. China’s business growth has been disrupted by coronavirus controls and a crackdown on excessive real estate lending. China’s economy is predicted to grow by 4.4% next year, which is still modest compared to recent Chinese advances.

The IMF said it projects economic growth of just a half percentage point in the 19-nation European bloc that uses the euro currency. Its energy prices are sharply higher as it weans itself from fuel purchases from Russia in protest of Moscow’s invasion of Ukraine.

In the U.S., the Federal Reserve has imposed sharp increases in its key benchmark interest rate five times this year to curb inflationary pressures, on the theory that higher borrowing costs for businesses and consumers will cut their purchases and dampen the increase in consumer prices.