The world economy will experience in 2023 one of the weakest periods of growth in recent decades, below 3%, the managing director of the International Monetary Fund (IMF) said on Thursday.
“Despite strong labor markets and consumer spending in most advanced economies, as well as China’s post-reopening recovery, we expect growth of less than 3% by 2023,” Kristalina Georgieva said in his keynote speech at the institution’s spring meetings.
The previous update of the IMF world economic report, from the end of January, already forecast growth of 2.9% in 2023, slightly better than the first estimates published last October.
“With rising geopolitical tensions and inflation still high, a strong recovery remains elusive,” Georgieva added at the meeting in Washington.
“That hurts everyone’s prospects, especially for the most vulnerable people and countries,” he said.
Global growth nearly halved last year, reaching 3.4%, as the shock of Russia’s invasion of Ukraine rippled through the global economy, bringing the recovery to an abrupt halt after the covid-19 pandemic.
While emerging markets in Asia are expected to substantially increase economic output — India and China will account for half of all growth this year — the good news will be offset by a slowdown of 90% of the world‘s advanced economies. .
“Growth remains historically weak, both now and in the medium term,” Georgieva said.
The IMF chief added that global growth is likely to remain at about 3% for the next five years, the lowest medium-term forecast since the 1990s.
Low-income countries are also expected to suffer a double whammy from high borrowing costs and a decline in demand for their exports, which could lead to increased poverty and hunger, according to Georgieva.
“About 15% of low-income countries are already in financial stress and another 45% are close to it,” he said, calling on wealthier IMF members to do more to provide support.