WASHINGTON, Jan 31 (KUNA) - Global growth is projected to fall from an estimated 3.4 percent in 2022 to 2.9 percent in 2023, then rise to 3.1 percent in 2024, the International Monetary Fund (IMF) said Monday evening.
In its latest World Economic Outlook (WEO) update, the IMF said that the forecast for 2023 is 0.2 percentage point higher than predicted in the October 2022 but below the "historical" (2000-2019) average of 3.8 percent.
"The rise in central bank rates to fight inflation and Russia's war in Ukraine continue to weigh on economic activity," the IMF noted.
The IMF stressed that "the rapid spread of COVID-19 in China dampened growth in 2022, but the recent reopening has paved the way for a faster-than-expected recovery."
Global inflation is expected to fall from 8.8 percent in 2022 to 6.6 percent in 2023 and 4.3 percent in 2024, according to the IMF.
"On the upside, a stronger boost from pent-up demand in numerous economies or a faster fall in inflation are plausible," the IMF said. "On the downside, severe health outcomes in China could hold back the recovery, Russia's war in Ukraine could escalate, and tighter global financing costs could worsen debt distress."
The IMF stressed that "financial markets could also suddenly reprice in response to adverse inflation news, while further geopolitical fragmentation could hamper economic progress."
The IMF forecasts growth in Middle East and Central Asia at 3.2 percent this year and rise to 3.7 percent in 2024.
IMF's chief economist Pierre-Olivier Gourinchas wrote in a blog in this regard that "this time around, the global economic outlook hasn't worsened. That's good news, but not enough. The road back to a full recovery, with sustainable growth, stable prices, and progress for all, is only starting."
"Growth will remain weak by historical standards, as the fight against inflation and Russia's war in Ukraine weigh on activity," he said.
He indicated "for advanced economies, the slowdown will be more pronounced, with a decline from 2.7 percent last year to 1.2 percent and 1.4 percent this year and next. Nine out of 10 advanced economies will likely decelerate."
US growth will slow to 1.4 percent in 2023 "as Federal Reserve interest-rate hikes work their way through the economy," he added.
He continued "Euro area conditions are more challenging despite signs of resilience to the energy crisis, a mild winter and generous fiscal support." (end)