IMF forecasts lower global growth in 2023 and 2024

The International Monetary Fund (IMF) yesterday downgraded the 2023 global growth forecast to 3% and to 2.9% next year from 3.5% in 2022.

Via its World Economic Outlook October Update, IMF said the projections remain below the historical (2000–19) average of 3.8%, and the forecast for 2024 is down by 0.1 percentage point from the July 2023 Update to the World Economic Outlook. 

For advanced economies, the expected slowdown is from 2.6% in 2022 to 1.5% in 2023 and 1.4% in 2024, amid stronger-than-expected US momentum but weaker-than-expected growth in the euro area. 

Emerging markets and developing economies are projected to have modestly declining growth, from 4.1% in 2022 to 4.0% in both 2023 and 2024, with a downward revision of 0.1 percentage point in 2024, reflecting the property sector crisis in China. 

Forecasts for global growth over the medium term, at 3.1%, are at their lowest in decades, and prospects for countries to catch up to higher living standards are weak. Global inflation is forecast to decline steadily, from 8.7% in 2022 to 6.9% in 2023 and 5.8% in 2024. However, the forecasts for 2023 and 2024 are revised by 0.1 percentage point and 0.6 percentage point, respectively, and inflation is not expected to return to target until 2025 in most cases.