The International Monetary Fund has significantly downgraded its outlook for the global economy for the second time in just three months as inflation and rapidly rising interest rates stymie activity.

The IMF forecasts growth of just 3.2 per cent this year and 2.9 per cent next year, 0.4 and 0.7 percentage points lower from April. This largely reflected slowdowns in the United States, China and in the Eurozone.