The Institute also expects capital flows to emerging markets to fall by 42% from last year.
Based on its new estimates, the global banking group said the risk of a recession has risen as real growth is expected to stagnate.
“Weakness has a broad base and leaves little room for error. The risk of a global recession is high. “In this context, we expect non-resident flows to emerging markets to slow significantly,” the Institute’s economists wrote in a report.
The institute has lowered its forecast for global GDP growth to 2.3% from 4.6%. For the G3, which includes the United States, the eurozone and Japan, this year’s growth is expected to be 1.9 %.
In China, economic growth is expected to slow from 5.1% to 3.5%.
“China’s Omicron wave is more disruptive than we anticipated and will have a substantial impact on capital growth and flows,” according to the Institute.
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