World GDP to grow 2.9% in 2023: IMF

The International Monetary Fund (IMF) projects world GDP growth, estimated at 3.4% in 2022, to decline to 2.9% in 2023, then rise to 3.1% in 2024.

Compared to the October forecast, both the 2022 estimate and the 2023 forecast are higher by about 0.2 percentage points, reflecting positive surprises and greater-than-expected resilience in many economies.

Overview of the World Economic Outlook Projections (Percent change, unless noted otherwise)

Negative growth in world GDP or world GDP per capita is not expected, as is often the case when a global recession occurs.

However, projected global growth in 2023 and 2024 is below the historical annual average (2000-19) of 3.8 percent.

The low growth forecast in 2023 reflects central bank rate hikes to fight inflation-especially in advanced economies-as well as the war in Ukraine.

The decline in growth in 2023 relative to 2022 is driven by advanced economies; in emerging market and developing economies, growth is estimated to bottom out in 2022.

Also, the IMF expects a pickup in growth in China with full reopening in 2023.

The expected rebound in 2024 in both groups of economies reflects the gradual recovery from the effects of the war in Ukraine and declining inflation.

World GDP

Following the global demand path, world trade growth is expected to slow in 2023 to 2.4%, despite the easing of supply bottlenecks, before rising to 3.4% in 2024.

These forecasts are based on a number of assumptions, including fuel and non-fuel commodity prices, which have generally been revised down since October, and interest rates, which have been revised up.

In addition, by 2023, the IMF expects oil prices to fall by about 16 percent, while non-fuel commodity prices will decline by an average of 6.3 percent.

Global interest rate assumptions have been revised upward, reflecting the intensification of actual and announced policy tightening by major central banks since October.

For advanced economies, growth is projected to decline sharply from 2.7 percent in 2022 to 1.2 percent in 2023, before rising to 1.4 percent in 2024, with a downward revision of 0.2 percentage points for 2024.


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