Economic headwinds are blowing.

The International Monetary Fund (IMF) on Tuesday, April 19, downgraded its forecast for U.S. economic growth, saying American gross domestic product will grow by 3.7% in 2022. That’s down from the 4% predicted in January, and would represent a two-percentage-point drop from the 5.7% growth experienced in 2021 in the bounce-back from 2020’s severe COVID-induced recession.

Beyond the devastating human costs of the war in #Ukraine, it is a major stress to the global economy and serious setback to the recovery.
In our latest #WEO, we have lowered our global growth forecast—for the second time in six months—to 3.6% in 2022. https://t.co/C7PmwG0YAx pic.twitter.com/QkcUKbTZeg

— Kristalina Georgieva (@KGeorgieva) April 19, 2022

IMF, a Washington, D.C.-headquartered international financial organization/lender that works to foster global monetary cooperation, noted that the U.S. economic expansion will be restrained by Federal Reserve interest rate increases aimed at fighting inflation plus a slowdown in economic activity in important American trading partners. In addition, Europe and Canada are expected to experience markedly slower growth this year.

The forecast on U.S. growth was part of IMF’s broader bleak outlet on the global economy. IMF is predicting that world GDP in 2022 will rise by 3.6% – down from the 6.1% growth experienced in 2021 and a decline from the 4.4% expansion predicted for this year in January.

The main culprit of the darker picture on GDP? Russia’s invasion of Ukraine, which is disrupting international trade, spurring inflation of fuel prices and other commodities, and intensifying volatility in a global market that’s still off-kilter due to the COVID-19 pandemic.

What impact will the war in Ukraine have on the global economy? Read our latest #IMFBlog to find out. https://t.co/SFp7kFYUwO #WEO pic.twitter.com/Rx0eHPn2tJ

— IMF (@IMFNews) April 19, 2022

“Beyond its immediate and tragic humanitarian impact, the war will slow economic growth and increase inflation,” said IMF economist Pierre-Oliver Gourinchas. “Overall economic risks have risen sharply, and policy tradeoffs have become even more challenging.”

The IMF forecast isn’t the only harbinger of tougher days ahead for the domestic and global economies. The World Bank has reduced its global growth forecast for 2022 by nearly a full percentage point, to 3.2% from 4.1%, due to the impacts from Russia’s invasion of Ukraine.

Meanwhile, Goldman Sachs has predicted that the U.S. economy has a 35% change of entering recession over the next two years.

The performance of the broader economy is important to the promotional products market, which tends to trend in the general direction of GDP. As economic activity revitalized last year, distributors in promo generated a 12% annual sales increase over 2020, bringing total industry revenue to $23.2 billion.