The International Monetary Fund raised its forecast for growth in 2023, with the global economy resilience better than expected in the face of successive shocks and the dissipation of recession risks in a number of countries, while the lifting of strict health restrictions in China gives hope for further recovery.
The International Monetary Fund expects global growth of 2.9 percent in 2023, according to its report issued yesterday, an increase of 0.2 percentage points from its previous forecast issued in October.
“The prospects are less pessimistic than our expectations in October,” said Pierre-Olivier Gourincha, head of the fund’s economics department, during a conference call. However, he warned that “the next year will remain difficult”, but “it may also constitute a turning point” in terms of growth and inflation, he believes.
It seems that the slowdown will be less than expected in a number of developed economies, especially in the United States, which will record growth of 1.4 percent in 2023, up 0.4 percentage points from the October numbers. The same applies to Germany and Italy, where the International Monetary Fund no longer expects a recession. As for the euro area, which is resisting better than expected, the energy crisis resulting from the war in Ukraine, it will record a growth rate of 0.7 percent, up 0.2 percentage points from the previous figures.
One of the most important factors for this recovery is the reopening of China after its abandonment of the zero Covid policy. Despite the chaotic management of lifting restrictions that led to a new surge in infections in the country, Chinese economic growth is expected to give an additional impetus to the global economy, with an expected growth of 5.2 percent, compared to 4.4 percent three months ago.
On the other hand, the International Monetary Fund indicated that inflation has slowed down after it recorded a significant increase in all parts of the world, and its level is expected to decline in 2023 from what it was in the previous year in most countries. Despite this, the fund slightly raised its inflation forecast to 6.6 percent, compared to 6.5 percent previously, to fall in 2024 to lower levels than in 2021 (4.3 percent, compared to 4.7 percent).
These figures are more optimistic than the expectations announced by the World Bank in mid-January, in which it expected a further slowdown in global growth, but that was before China abandoned its strict health policy.
In all cases, the two financial institutions adopt different standards in their accounts.
