The International Monetary Fund (IMF) has lowered its outlook for global economic growth in
2023 to 2.7% from a previous forecast of 2.9% and warned that the “worst is yet to come.”
In January of this year, the IMF had forecast that the global economy would grow by 3.8% in
2023.
Now, the Washington, D.C.-based financial agency of the United Nations says it foresees a 25%
chance that global growth will slow to less than 2% next year.
The IMF said central bank efforts to manage the hottest inflation in 40 years risks slowing the
world economy, noting other risks from the war in Ukraine and COVID-19 lockdowns in China.
In its latest “World Economic Outlook,” the IMF said that one-third of the global economy risks
contracting next year, with the U.S., European Union and Chinese economies all slowing down
in recent months.
Excluding the unprecedented slowdown of 2020 due to the pandemic, next year’s economic
growth could be the weakest since the 2009 financial crisis, said the IMF.
“The worst is yet to come, and for many people 2023 will feel like a recession,” the agency
wrote in its report.
The IMF forecasts that Inflation will peak later this year at an annual rate of 8.8% and will
remain elevated for longer than previously expected, only slowing to 6.5% next year and 4.1%
in 2024.
For this year, the IMF sees world economic growth of 3.2%, unchanged from July but down from
the 4.4% estimated in January.
Advanced economies are forecast to grow 1.1% in 2023 compared with 3.7% for emerging
markets and developing economies, said the financial agency.