Global economic growth in 2023 will be higher, according to a new forecast by the International Monetary Fund. The IMF cited “surprisingly resilient” demand in the U.S. and Europe, lower energy costs and the reopening of China’s economy after lifting tough pandemic restrictions as the reason.
The IMF said global economic growth would slow to 2.9 percent in 2018. in 2023, compared to 3.4 percent. in 2022, but its latest projection marks an improvement over the October forecast of 2.7 percent. growth this year.
World economy – IMF forecasts
IMF chief economist Pierre-Olivier Gourinchas said thatThe risk of recession has subsided and central banks are making progress in controlling it inflation, however, he noted that further efforts are needed to limit price increases. He also warned that new difficulties could arise from further escalation war in Ukraine and China’s fight against the coronavirus.
The IMF expects US GDP to grow by 1.4% vs. 1.0% expected in October; against 2.0 percent in 2022. The improvement was explained by stronger than expected consumption and investments in the third quarter of 2022 as well as a buoyant labor market and good consumer standing.
In euro area growth is expected to be 0.7% in 2023, compared to 0.5% in 2023. in the October forecast; against 3.5 percent growth in 2022. According to the IMF, Europe has adapted to higher energy costs faster than expected, and the easing energy prices helped the region.
Great Britain was the only advanced economy for which the IMF predicted a recession this year. The reason given was that households are struggling with rising living costs, including energy and mortgage costs.
The fund revised its 2023 growth forecast for China to 5.2% from 4.4% in its October forecast after a zero-COVID policy in 2022 saw China’s growth rate fall to 3.0%.
The report said there were “positive surprises” in many economies and “unexpectedly strong resilience”. The IMF does not expect the global economy to plunge into recession this year, which economists did not rule out in the fall.
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