International Monetary Fund IMF revised its global growth expectations with the new report it shared today. With its latest update in the World Economic Outlook report, the IMF announced its 2023 forecast as 3%. The leading financial institution had limited its growth expectation to 2.8% in April. The IMF did not need to revise the 3% figure for 2024.
After the pandemic, although the economy’s lack of vitality, especially in China, increased the concerns, the growth expectation increased.
Inflation Will Continue to Fall
The International Monetary Fund opened a separate parenthesis on inflation in the report. According to the report, the 8.7% global inflation recorded in 2022 will weaken to 6.8% at the end of the year. Analysts expect a less accelerated decline in core inflation from 6.5% to 6%. IMF chief economist Pierre-Olivier Gourinchas wrote on his blog:
“The global economy continues to be freed from the effects of the pandemic conditions and the Russian-Ukrainian war. Although there are good prospects in the short term, there are still problems in the medium and long term.”
The IMF official also pointed to the negative atmosphere created by the developments originating from the USA and China. Gourinchas thinks that the ongoing slow recovery and real estate sector problems in China, and the depleted household savings, expensive loans and cost of living crisis in the US, could have a negative impact.
The International Monetary Fund has predicted that the US and China will grow by 1.8% and 5.2% in 2023. However, the institution’s 2024 forecast is more pessimistic. The IMF expects the American economy to grow by 1% and the Asian giant by 4.5% in 2024.
