WASHINGTON, Jan 31 (Bernama) – Global economic growth will slow to 2.9 per cent in 2023, the International Monetary Fund (IMF) said, revising its previous forecast upward by 0.2 percentage points, reported Sputnik.
“Global growth is projected to fall from an estimated 3.4 per cent in 2022 to 2.9 per cent in 2023, then rise to 3.1 per cent in 2024. The forecast for 2023 is 0.2 percentage point higher than predicted in the October 2022 World Economic Outlook (WEO) but below the historical (2000–19) average of 3.8 per cent,” the IMF said.
Global inflation will slow to 6.6 per cent this year and 4.3 per cent in 2024, still remaining well above pre-pandemic levels, it added.
“Global inflation is expected to fall from 8.8 per cent in 2022 to 6.6 per cent in 2023 and 4.3 per cent in 2024, still above pre-pandemic (2017–19) levels of about 3.5 per cent.”
The global fight against inflation, the conflict in Ukraine and new Covid-19 breakouts in China weighed on global economic activity in 2022, the report noted.
“The first two factors will continue to do so in 2023,” the IMF added.
In the US, economic growth is projected to fall from 2.0 per cent in 2022 to 1.4 per cent in 2023 and 1.0 per cent in 2024.
“There is a 0.4 percentage point upward revision for annual growth in 2023, reflecting carryover effects from domestic demand resilience in 2022, but a 0.2 percentage point downward revision of growth in 2024 due to the steeper path of Federal Reserve rate hikes, to a peak of about 5.1 per cent in 2023,” the IMF said.
In the euro area, economic growth will bottom out at 0.7 per cent in 2023 before rebounding to reach 1.6 per cent in 2024.
“Growth in the euro area is projected to bottom out at 0.7 per cent in 2023 before rising to 1.6 per cent in 2024,” the WEO said on Monday.
The 0.2 percentage point upward revision to the forecast for 2023 reflects the effects of faster rate hikes by the European Central Bank and eroding real incomes, the report added.
Economic growth in China is projected to increase to 5.2 per cent this year and drop to 4.55 in 2024.
“Growth in China is projected to rise to 5.2 per cent in 2023, reflecting rapidly improving mobility, and to fall to 4.5 per cent in 2024 before settling at below 4 per cent over the medium term amid declining business dynamism and slow progress on structural reforms,” the report said.