Global growth forecast for 2023 remains at 2.7 percent

Container port in the UK

The IMF believes the slowdown in global growth will bottom out and reverse towards the end of 23 and early 24.

(Photo: dpa)

Washington The International Monetary Fund (IMF) is not expected to lower its growth forecast of 2.7 percent for 2023. “Growth will continue to slow in 2023,” International Monetary Fund (IMF) Director Kristalina Georgieva told reporters at the IMF’s Washington headquarters on Thursday (local time).

2023 will be another difficult year for the global economy and inflation will remain stubborn, but she does not expect consecutive downgrades like last year barring unexpected developments.

The IMF believes the slowdown in global growth will bottom out and reverse towards the end of 23 and early 24. Georgieva noted that fears of an oil price hike have not materialized and labor markets remain strong. “The positive lies in the resilience of the labor markets. As long as people are busy, they will spend even when prices are high… and that has helped the economy.”

However, there are still major uncertainties, including a major climate event, a major cyber attack or the risk of an escalation of the Russian war in Ukraine, for example through the use of nuclear weapons.

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“We are now in a world that is more prone to crises and we have to be open to the fact that there could be risks that we are not even thinking about,” said the IMF chief. “We’ve seen that in recent years. The unthinkable happened twice.”

US escapes recession and experiences ‘soft landing’

The United States can avoid a recession this year and achieve a “soft landing” for its economy, according to Georgieva. “There are some arguments for hoping that the US will not fall into a recession,” said the IMF chief. “Even if it’s technically a recession, I think it’s going to be a very mild recession.”

Definition: What is a recession?

US labor markets are stable and consumer demand is strong despite rate hikes to fight inflation. There has been a healthy shift away from excess purchases of goods, which have pushed prices down, back to demand for services.

She noted that the assessment of recessions is usually the subject of intense debate, but said it tends to be a soft landing for the United States. The IMF forecast 1.0 percent GDP growth in October for 2023, a forecast it will update this month. The World Bank forecast US growth of 0.5 percent for 2023 on Tuesday.

More: War in Ukraine, China Crisis, Debt Records – Why 2023 will be a fateful year for the West

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