The International Monetary Fund (IMF) raises the global growth forecast and corrects it compared to the forecast from October.
The fund believes that the world economy will grow by 2.9% this year, this represents an improvement of 0.2% compared to the October forecast. According to its calculation, 84% of countries will face lower inflation this year compared to 2022. At the same time as the update, she warned that it is likely that high interest rates and Russia’s invasion of Ukraine will still weigh on activity.
In addition, the fund revised its forecast for 2024 to 3.1%. “Growth will remain weak by historical standards as the fight against inflation and Russia’s war in Ukraine weigh on activity,” its research director said. “Economic growth proved to be stable in the third quarter of 2022, with strong labor markets, robust household consumption and business investment, and a better-than-expected adjustment to the energy crisis in Europe.”
In addition, China announced the reopening of the economy after closures caused by the corona. This, according to her estimation, is expected to contribute to higher global growth. The Managing Director of the International Monetary Fund, Kristalina Georgieva, warned earlier this month that the economy is not as bad as feared. “But less bad still does not mean good,” she noted.
The fund also warned of several factors that could worsen the forecast in the coming months. For example: if the re-opening of the economy in China is stopped; inflation that will remain high; and the consequences of Russia’s prolonged invasion of Ukraine which will weigh on energy and food costs.
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