The International Monetary Fund (IMF) has announced that it expects global growth to fall from 3.4% in 2022 to 2.9% in 2023, before rebounding to 3% in 2024. This forecast was made during a press briefing held in Singapore to mark the launch of the January update of the World Economic Outlook report.
The 2023 forecast of 2.9% growth is slightly higher than the 2.7% forecast published in October 2022. The ongoing recovery of the global economy from the COVID-19 pandemic and the impacts of Russia’s invasion of Ukraine remain on track, albeit fragile. The IMF cites rising interest rates and the war in Ukraine as factors that continue to weigh on economic activity.
Despite the economic slowdown, inflation pressures are proving broader and more persistent than anticipated, resulting in central banks likely continuing to tighten monetary policy to fight inflation. The IMF warns that the world could easily fall into recession this year.
According to the IMF report, “The worst is yet to come, and for many people, 2023 will feel like a recession”. The global economy continues to face steep challenges, with the IMF’s global growth forecast for 2023 at 2.9%, 0.2 percentage points higher than the July forecast, but still below the historical average of 3.8%.
In conclusion, the IMF forecasts a decline in global growth for 2023 before a modest rebound in 2024. The gradual recovery from the COVID-19 pandemic and Russia’s invasion of Ukraine remains fragile and uncertain, with potential recession risks looming. Central banks are expected to maintain tight monetary policies in response to inflation pressures, further complicating the global economic landscape.