The International Monetary Fund (IMF) reports that global economic growth was low in 2023, with the slowdown concentrated in Europe and the United Kingdom. According to the IMF’s latest World Economic Outlook Update, “A Rocky Recovery,” released at the World Bank Group/IMF 2023 Spring Meetings, global growth is expected to bottom out at 2.8 % in 2023 and rise modestly to 3.0 % in 2024. The baseline forecast projects a decline from 3.4 % in 2022 to 2.8 % in 2023, before stabilising at 3 % the following year.
Advanced economies are slated to experience a pronounced slowdown, with growth falling from 2.7 % in 2022 to 1.3 % in 2023. The euro area and the United Kingdom are especially affected, with growth projected to drop to 0.8 % and –0.3 % this year, respectively, before rebounding to 1.4 % and 1 % thereafter. In contrast, many emerging markets and developing economies are picking up momentum despite a 0.5‑percentage‑point downward revision; year‑on‑year growth is expected to accelerate to 4.5 % in 2023 from 2.8 % in 2022.
Sub‑Saharan Africa’s growth is projected to remain moderate at 3.6 % in 2023, rising to 4.2 % in 2024. Nigeria’s economy is forecasted to grow 3.2 % in 2023 and 3.0 % in 2024. Global inflation is expected to decline, though more slowly than initially anticipated, falling from 8.7 % last year to 7 % in 2023 and 4.9 % in 2024. The IMF notes that inflation is slowly receding, but economic growth remains historically low and financial risks have increased.
The report emphasizes that the global economy’s gradual recovery from the pandemic and Russia’s invasion of Ukraine remains on track. China’s reopened economy is rebounding strongly, supply‑chain disruptions are easing, and energy and food market dislocations caused by the war are receding. Simultaneously, the massive, coordinated tightening of monetary policy by most central banks should begin to bear fruit, bringing inflation back toward target levels.
Policymakers are urged to maintain a steady hand and clear communication. With financial instability contained, monetary policy should stay focused on reducing inflation while remaining ready to adjust quickly to financial developments. Fiscal policy can also play an active role; tighter fiscal measures that cool economic activity would support monetary policy, allowing real interest rates to return more swiftly to a low natural level.
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