IMF Projects Global Economy to Recover Gradually. The International Monetary Fund (IMF) said that the global economy is recovering gradually from the Covid-19 pandemic and Russia’s invasion of Ukraine.
In the IMF Economic Growth Blog report, the agency estimates that global economic growth will slow down from 3.5 percent last year to 3 percent this year. This figure is up 0.2 percent from the IMF’s projection in April 2023.
Then, global inflation is also projected to decline from 8.7 percent last year to 6.8 percent this year and 5.2 percent in 2024. Furthermore, the IMF assesses that the slowdown is concentrated in developed countries with growth dropping from 2.7 percent in 2022 to 1.5 percent this year. Next year is also considered to remain weak, with growth of 1.4 percent.
Then, the euro area is also projected by the IMF to slow down sharply. According to him, the euro comrades are still recovering from the sharp jump in gas prices last year, which was caused by the war.
When compared to growth in developing countries, it is expected to increase with year-on-year (yoy) growth, increasing from 3.1 percent in 2022 to 4.1 percent this year.
Then, the global average growth closes the significant difference between countries with Asian growth growing and developing strongly at 5.3 percent in 2023. Meanwhile, many commodity producers will suffer from a decline in export earnings.
IMF Global Economy Recover. Then, even though stronger growth and lower inflation than expected are good news, the IMF assesses that the balance still tends to be on the negative side.
First, there are growing signs that global activity is losing momentum. Second, core inflation excluding energy and food prices remained far above the central bank’s target. The IMF predicts core inflation will decline gradually from 6 percent in 2023 to 4.7 percent in 2024, an upward revision of 0.4 percentage point.
The IMF also projects that core inflation in developed countries will remain unchanged at an annual average rate of 5.1 percent in 2023, before falling to 3.1 percent in 2024. Through this projection, the IMF assesses that the war against inflation has not yet been won.