IMF upgrades global economic forcast to 2.9% for 2023; 3.1% for 2024
Analysts at the International Monetary Fund have upgraded their forecast for the year ahead. They say global growth will still be slower compared to recent decades, but it will be better than they previously projected.
The IMF now projects the world economy will expand by 2.9 percent in 2023. That’s up two-tenths of a percentage point from its earlier projection. The agency points to easing inflation and China’s shift away from its zero-Covid policy for the change. The forecast for 2024 is slightly better, at 3.1 percent.
Pierre-Olivier Gourinchas, IMF Economic Counsellor and Director of the Research Department, said, “This time around the global economic outlook hasn’t worsened. That’s good news, but not enough. The road back to a full recovery with sustainable growth, stable prices, and progress for all has only started.”
The revised projection is still below the average for the 2 decades up to 2019, which was 3.8 percent.
The UN financial agency projects the US economy will expand by 1.4 percent this year and just 1 percent next year. The main reason is high-interest rates.
For China, it forecasts 5.2 percent growth in 2023 and 4-and-a-half percent the following year.
The IMF expects Japan will see 1.8-percent growth this year due to the continuation of the central bank’s monetary easing program. That’s two-tenths of a point up from the previous outlook. The forecast for 2024 is only 0.9 percent. The IMF cites the effects of past economic stimulus measures for that prediction.
The IMF says Russia’s invasion of Ukraine continues to weigh on economic activity. Another factor is interest rate hikes, which central banks have been using to tame inflation.
In its latest forecast Tuesday, the IMF highlights the resilience and adaptation of the European economy in the face of Russia’s war in Ukraine, the energy crisis and soaring inflation, but warns risks and uncertainty remain elevated.
The prospect of a recession in the eurozone is fading as the International Monetary Fund (IMF) moderately improves its economic forecast for the bloc.
The eurozone is now projected to grow 0.7% this year – up from 0.5% in the previous forecast – and 1.6% in 2024.
