## World Economic Outlook, October 2022: Countering the Cost-of-Living Crisis _World Economic Outlook, October 2022_ ## Source details **Canonical URL:** [World Economic Outlook, October 2022: Countering the Cost-of-Living Crisis](https://www.imf.org/en/publications/weo/issues/2022/10/11/world-economic-outlook-october-2022) ## Other formats - [Markdown version](/en/publications/weo/issues/2022/10/11/world-economic-outlook-october-2022/index.md) - [Structured JSON version](/en/publications/weo/issues/2022/10/11/world-economic-outlook-october-2022/index.json) - [Bundle manifest](/en/publications/weo/issues/2022/10/11/world-economic-outlook-october-2022/bundle-manifest.json) ## Bibliographic details - Published: October 11, 2022 --- ### Inflation and uncertainty - Global economic activity is experiencing a broad-based and sharper-than-expected slowdown, with inflation higher than seen in several decades. - Key drivers weighing on the outlook: the cost-of-living crisis, tightening financial conditions in most regions, Russia’s invasion of Ukraine, and the lingering COVID-19 pandemic. - Growth projections: - Global growth is forecast to slow from 6.0 percent in 2021 to 3.2 percent in 2022 and 2.7 percent in 2023. - This is the weakest growth profile since 2001 except for the global financial crisis and the acute phase of the COVID-19 pandemic. - Inflation projections: - Global inflation is forecast to rise from 4.7 percent in 2021 to 8.8 percent in 2022. - Inflation is forecast to decline to 6.5 percent in 2023 and to 4.1 percent by 2024. - Policy guidance: - Monetary policy should stay the course to restore price stability. - Fiscal policy should aim to alleviate cost-of-living pressures while maintaining a sufficiently tight stance aligned with monetary policy. - Structural reforms can support the fight against inflation by improving productivity and easing supply constraints. - Multilateral cooperation is necessary for fast-tracking the green energy transition and preventing fragmentation. ### Global prospects and policies - The slowdown in global economic activity is broad-based and sharper-than-expected, with inflation higher than seen in decades. - The economic outlook depends on: - Successful calibration of monetary and fiscal policies. - The course of the war in Ukraine. - Growth prospects in China. - Risks identified as unusually large: - Monetary policy could miscalculate the right stance to reduce inflation. - Diverging policy paths in the largest economies could exacerbate the US dollar’s appreciation. - Tightening global financing could trigger emerging market debt distress. - A worsening of China’s property sector crisis could undermine growth. - Policy priorities for policymakers: - Focus on restoring price stability. - Alleviate cost-of-living pressures. - Pursue multilateral cooperation to fast-track the green energy transition and prevent fragmentation. ### Wage Dynamics Post–COVID-19 and wage-price spiral risks - Context: Inflation has reached a 40-year high in some economies. - Observations: - Although wage growth has generally stayed below inflation so far, some observers warn of potential wage-price spirals where prices and wages feed off each other. - Analytical findings: - Similar historical episodes were not followed by wage-price spirals on average. - Analysis highlights that more backward-looking expectations require stronger and more frontloaded monetary tightening to reduce risks of inflation de-anchoring. - Risks of a sustained wage-price spiral appear limited since underlying inflation shocks come from outside the labor market and monetary policy is tightening aggressively. ### Near-term macroeconomic impact of decarbonization policies - Framing: - Decades of procrastination have transformed what could have been a smooth transition into a more challenging one. - By the end of the decade, the global economy needs to emit 25 percent less greenhouse gases than in 2022 to have a fighting chance to reach the goals set in Paris in 2015 and avert catastrophic climate disruptions. - Approach: - The chapter uses a new model developed at the IMF (GMMET) to analyze the near-term macroeconomic impact of feasible decarbonization policies and potential challenges for monetary policy. *World Economic Outlook Report, October 2022: Countering the Cost-of-Living Crisis* --- ## Content in this bundle - **Chapter 1 Annex** - [Chapter 1 Annex (Markdown version)](/-/media/files/publications/weo/2022/october/english/ch1annex.pdf.md){rel="alternate" type="text/markdown"} - [Chapter 1 Annex (PDF)](/-/media/files/publications/weo/2022/october/english/ch1annex.pdf){rel="external" type="application/pdf"} - **Chapter 2** - [Chapter 2 (Markdown version)](/-/media/files/publications/weo/2022/october/english/ch2.pdf.md){rel="alternate" type="text/markdown"} - [Chapter 2 (PDF)](/-/media/files/publications/weo/2022/october/english/ch2.pdf){rel="external" type="application/pdf"} - **Chapter 2 Annex** - [Chapter 2 Annex (Markdown version)](/-/media/files/publications/weo/2022/october/english/ch2annex.pdf.md){rel="alternate" type="text/markdown"} - [Chapter 2 Annex (PDF)](/-/media/files/publications/weo/2022/october/english/ch2annex.pdf){rel="external" type="application/pdf"} - **Chapter 3** - [Chapter 3 (Markdown version)](/-/media/files/publications/weo/2022/october/english/ch3.pdf.md){rel="alternate" type="text/markdown"} - [Chapter 3 (PDF)](/-/media/files/publications/weo/2022/october/english/ch3.pdf){rel="external" type="application/pdf"} - **Chapter 3 Annex** - [Chapter 3 Annex (Markdown version)](/-/media/files/publications/weo/2022/october/english/ch3annex.pdf.md){rel="alternate" type="text/markdown"} - [Chapter 3 Annex (PDF)](/-/media/files/publications/weo/2022/october/english/ch3annex.pdf){rel="external" type="application/pdf"} - **WEO Chapter 2 Oct 2022** - [WEO Chapter 2 Oct 2022 (XLSX)](/-/media/files/publications/weo/2022/october/english/data/weooct2022-ch2.xlsx){rel="external" type="application/vnd.openxmlformats-officedocument.spreadsheetml.sheet"} - **Dataset overview: WEO Chapter 3 Oct. 2022** - [Dataset overview: WEO Chapter 3 Oct. 2022 (XLSX)](/-/media/files/publications/weo/2022/october/english/data/weooct2022-ch3.xlsx){rel="external" type="application/vnd.openxmlformats-officedocument.spreadsheetml.sheet"} - **October 2022 WEO Chapter 1 — Dataset overview** - [October 2022 WEO Chapter 1 — Dataset overview (XLSX)](/-/media/files/publications/weo/2022/october/english/data/weooctober2022-ch1.xlsx){rel="external" type="application/vnd.openxmlformats-officedocument.spreadsheetml.sheet"} - **Executive Summary** - [Executive Summary (Markdown version)](/-/media/files/publications/weo/2022/october/english/execsum.pdf.md){rel="alternate" type="text/markdown"} - [Executive Summary (PDF)](/-/media/files/publications/weo/2022/october/english/execsum.pdf){rel="external" type="application/pdf"} - **Foreword** - [Foreword (Markdown version)](/-/media/files/publications/weo/2022/october/english/foreword.pdf.md){rel="alternate" type="text/markdown"} - [Foreword (PDF)](/-/media/files/publications/weo/2022/october/english/foreword.pdf){rel="external" type="application/pdf"} - **Statistical Appendix** - [Statistical Appendix (Markdown version)](/-/media/files/publications/weo/2022/october/english/statsappendix.pdf.md){rel="alternate" type="text/markdown"} - [Statistical Appendix (PDF)](/-/media/files/publications/weo/2022/october/english/statsappendix.pdf){rel="external" type="application/pdf"} - **Table a** - [Table a (Markdown version)](/-/media/files/publications/weo/2022/october/english/tablea.pdf.md){rel="alternate" type="text/markdown"} - [Table a (PDF)](/-/media/files/publications/weo/2022/october/english/tablea.pdf){rel="external" type="application/pdf"} - **Table b** - [Table b (Markdown version)](/-/media/files/publications/weo/2022/october/english/tableb.pdf.md){rel="alternate" type="text/markdown"} - [Table b (PDF)](/-/media/files/publications/weo/2022/october/english/tableb.pdf){rel="external" type="application/pdf"} - **Annex Table 1.1.1.** - [Annex Table 1.1.1. (Markdown version)](/-/media/files/publications/weo/2022/october/english/text.pdf.md){rel="alternate" type="text/markdown"} - [Annex Table 1.1.1. (PDF)](/-/media/files/publications/weo/2022/october/english/text.pdf){rel="external" type="application/pdf"} --- ## References - [Download Data](https://www.imf.org/en/Publications/WEO/weo-database/2022/October) - [DataMapper](https://www.imf.org/external/datamapper/datasets/WEO) - [Blog by Pierre-Olivier Gourinchas](https://www.imf.org/en/Blogs/Articles/2022/10/11/policymakers-need-steady-hand-as-storm-clouds-gather-over-global-economy) - [October 2022 Database](https://imf.org/en/Publications/WEO/weo-database/2022/October) - [Blog by Pierre-Olivier Gourinchas](https://origin-blogs.imf.org/en/blogs/articles/2022/10/11/policymakers-need-steady-hand-as-storm-clouds-gather-over-global-economy) - [blog by imf staff](https://www.imf.org/en/Blogs/Articles/2022/10/05/wage-price-spiral-risks-appear-contained-despite-high-inflation) - [blog by imf staff](https://www.imf.org/en/Blogs/Articles/2022/10/05/further-delaying-climate-policies-will-hurt-economic-growth) _Source: https://www.imf.org/en/publications/weo/issues/2022/10/11/world-economic-outlook-october-2022_