IMF upgrades its outlook for the global economy in 2023
WASHINGTON (AP) — The outlook for the global economy is growing slightly brighter as China eases its zero-COVID policies and the world shows surprising resilience in the face of high inflation, elevated interest rates and Russia's ongoing war against Ukraine.
That's the view of the International Monetary Fund (IMF), which now expects the world economy to grow 2.9 per cent this year. That forecast is better than the 2.7 per cent expansion for 2023 that the IMF predicted in October, though down from the estimated 3.4 per cent growth in 2022.
The IMF, a 190-country lending organisation, foresees inflation easing this year, a result of aggressive interest rate hikes by the Federal Reserve and other major central banks.
Those rate hikes are expected to slow the consumer demand that has driven prices higher.
Globally, the IMF expects consumer inflation to decelerate from 8.8 per cent last year to 6.6 per cent in 2023 and 4.3 per cent in 2024.
A big factor in the upgrade to global growth was China's decision late last year to lift anti-virus controls that had kept millions of people at home. The IMF said China's “recent reopening has paved the way for a faster-than-expected recovery.”
The IMF noted that the world economy still faces serous risks. They include the possibility that Russia's war against Ukraine will escalate, that China will suffer a sharp increase in COVID cases and that high interest rates will cause a financial crisis in debt-laden countries.
The global outlook has been shrouded in uncertainty since the coronavirus pandemic struck in early 2020.
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