The International Monetary Fund slightly lowered its outlook for the global economy on Tuesday, while predicting that most countries will avoid a recession this year despite economic worries and geopolitical strains. | AFP
The IMF’s expectations for the United States were slightly rosier: the world’s largest economy is expected to grow by 1.6 percent in 2023, marginally higher than previously predicted.
But serious risks relating to financial stability have emerged, he said, referring to banking turmoil unleashed last month after the dramatic collapse of Californian lender Silicon Valley Bank.The overall picture painted by the WEO is gloomy, with global growth forecast to slow in both the short and medium terms.
Both 2023 and 2024 inflation forecasts were revised upwards and remain significantly above the two percent target set by the US Federal Reserve and other central banks, suggesting policymakers have a long way to go before inflation is under control.But almost all advanced economies are expected to avoid a recession this year and next.
The picture is more positive among emerging market economies, with China forecast to grow by 5.2 percent this year. But growth is predicted to slow to 4.5 percent in 2024, as the impact of its reopening from the Covid-19 pandemic fades.
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