Global Economy Slowdown Expected, IMF Report Suggests

The International Monetary Fund (IMF) has projected a decline in global growth to 3.0% for 2023, with a further decrease to 2.9% anticipated in 2024, according to its report titled “Navigating Global Divergences.” This slowdown is expected due to several factors, including rising living costs, geo-economic fragmentation, the withdrawal of fiscal support, and cyclical elements.

Advanced economies are forecasted to see a reduction in growth from 2.6% in 2022 to 1.5% in 2023, with an additional drop to 1.4% in 2024, prompted by policies intended to combat inflation. In contrast, developing economies are anticipated to experience a minor decline from 4.1% in 2022 to 4.0% in the following years, highlighting widening disparities between different regions.

Global inflation is projected to decrease from 8.7% in 2022 to 6.9% in 2023, and further to 5.8% in 2024. This reduction is largely attributed to stricter monetary policies and lower commodity prices, although core inflation pressures are expected to diminish at a slower rate.

The report also highlights potential risks such as the ongoing crisis in China’s property sector, the conflict in Ukraine, extreme weather events, the shift to green energy, and possible increases in food and energy prices stemming from climate and geopolitical disturbances.