The IMF – International Monetary Fund – has just released its update to the WEO (World Economic Outlook), presenting the new estimates on the growth of world GDP.
The Washington institution cut its global economic growth outlook for 2023 by 0.2 percentage points from its July estimates, projecting an expansion of 2.7%.
Millions of people around the world will live in conditions that will be perceived as recessionary, the Fund warned again.
Aside from GDP trends during the global financial crisis and the peak of the Covid-19 pandemic, 2023 will see “the weakest growth rate since 2001”.
World GDP in 2022 is expected to remain stable with growth of 3.2%, however almost halved by the 6% expansion in 2021.
“The worst is yet to come, and for many people 2023 will be like experiencing a recession,” reads the report, which follows the warnings already issued by the United Nations, the World Bank and many CEOs.
The International Monetary Fund presented the three factors that are hindering growth: the invasion of Ukraine by Russia; the rising cost of living (with inflation) and China’s economic slowdown. Together, the three factors are creating a “volatile” period from an economic, geopolitical and climatic point of view.
The IMF has specified that more than a third of the global economy will see two consecutive quarters of negative growth, while the three main economies – the United States, the European Union and China – will continue to weaken.
The global inflation rate, the Fund continues, will peak this year, rising from 4.7% in 2021 to 8.8%, “remaining high for a longer period than previously expected”. Inflation will then slow to 6.5% in 2023 and to 4.1% by 2024.