ANKARA

The International Monetary Fund (IMF) on Tuesday lowered its 2022 global economic growth forecast, as the war between Russia and Ukraine continues. 

Global economy is now expected to expand by 3.6% this year, down 0.8 percentage point from the previous growth estimate of 4.4% made in January, according to the World Economic Outlook report released on Tuesday.

"Economic damage from the conflict will contribute to a significant slowdown in global growth in 2022," said the report, titled War Sets Back the Global Recovery.

"A severe double-digit drop in GDP for Ukraine and a large contraction in Russia are more than likely, along with worldwide spillovers through commodity markets, trade, and financial channels," it added.

The IMF said the war reduces growth and adds to inflation, as fuel and food prices increase rapidly, and especially low-income countries are affected the most.

"Elevated inflation will complicate the trade-offs central banks face between containing price pressures and safeguarding growth. Interest rates are expected to rise as central banks tighten policy, exerting pressure on emerging market and developing economies," it said.

The IMF said inflation is expected to remain high longer than anticipated, due to war-induced commodity price increases and broadening price pressures.

For 2022, inflation is projected at 5.7% in advanced economies and 8.7% in emerging market and developing economies, which are 1.8 and 2.8 percentage points higher, respectively, than previous estimates made in January.

While the US economy is now estimated to grow 3.7% this year, down from the previous forecast of 4%, the UK's economy is expected to expand 3.7%, down from 4.7%.

Euro area economy is forecast to grow 2.8%, down from the previous expectation of 3.9%. Germany is anticipated to grow 2.1%, down from 3.8%.

Turkish economy is estimated to expand 2.7% this year, down from the previous forecast of 3.3%.

Russia, on the other hand, is expected to see its economy contract 8.5% this year, while it was expected to grow 2.8% in the forecast made in January.