The International Monetary Fund (IMF) has issued a warning about the global economic growth prospects for the coming years. According to the IMF, the global economic growth rate is projected to decrease from 3.5 percent in 2022 to 3 percent in 2023 and 2.9 percent in 2024. These figures are significantly below the historical average of 3.8 percent recorded between 2000 and 2019.[0]
The IMF's research director highlighted that the latest projections indicate a slowdown in world economic growth, with a decrease from 3.5 percent in 2022 to 3 percent in 2023 and 2.9 percent in 2024. This downward trend reflects the challenges faced by the global economy.
Furthermore, the IMF raised concerns about inflation, stating that it is expected to gradually decrease from its peak of 8.7 percent in the previous year to an average of 6.9 percent in 2023 and 5.8 percent in 2024. However, these figures have been revised upward, indicating the possibility of entrenched inflation, which could pose challenges for central banks.[1]
The IMF also emphasized that global economic growth remains slow and uneven, with growing divergences among countries. The global economy is described as “limping along, not sprinting.” Despite the resilience shown by the global economy in overcoming the shocks of the pandemic, high inflation, and the war in Ukraine, it is still struggling to achieve strong and sustainable growth.[2]
The United States, on the other hand, is expected to experience stronger growth than previously anticipated.[1] The IMF raised its growth projections for the US economy to 2.1 percent in 2023 and 1.5 percent in 2024, indicating an improvement of 0.3 and 0.5 percentage points, respectively.[3]
In terms of inflation, the IMF projected that global headline inflation will increase to 5.8 percent in 2024, up from the previous estimate of 5.2 percent.[4] The report also highlighted concerns that high inflation could become a self-fulfilling prophecy, as expectations of rising prices could lead to higher prices for goods and services and demands for higher wages.[5]
The euro area's growth forecast was revised downward by 0.2 percentage points to 0.7 percent in 2023 and by 0.3 percentage points to 1.2 percent in 2024.[6] The IMF also released its World Economic Outlook, which revised its forecast for US growth higher while predicting slower expansion for the eurozone.
The IMF's report also highlighted the risks posed by volatile commodity prices, geopolitical tensions, and the ongoing conflict in the Middle East. It emphasized the need to address inflation and unlock growth to achieve a more sustainable economic recovery.
In conclusion, the IMF's warning about the slowing global economic growth and concerns about inflation reflect the challenges faced by the global economy. While the United States is expected to experience stronger growth, the euro area's growth prospects have been revised downward. The IMF stressed the importance of addressing inflation and implementing measures to unlock growth in order to achieve a more sustainable and robust economic recovery.
0. “IMF downgrades Nigeria’s economic growth” Punch Newspapers, 10 Oct. 2023, https://punchng.com/imf-downgrades-nigerias-economic-growth/
1. “Global economy still only limping, IMF says” POLITICO Europe, 10 Oct. 2023, https://www.politico.eu/article/global-economy-limp-along-avoid-hard-fall-imf-international-monetary-fund
2. “IMF: Growth coming with Tinubu’s economic policies” The Nation Newspaper , 11 Oct. 2023, https://thenationonlineng.net/imf-growth-coming-with-tinubus-economic-policies
3. “IMF hikes U.S. growth forecast for 2023, leaves global outlook unchanged” CNBC, 10 Oct. 2023, https://www.cnbc.com/2023/10/10/imf-raises-us-growth-forecast-leaves-global-outlook-unchanged.html
4. “IMF says global economy ‘limping along' as it faces new threat from Israel-Gaza war” Fox Business, 10 Oct. 2023, https://www.foxbusiness.com/economy/imf-global-economy-limping-along-faces-new-threat-israel-gaza-war
5. “The IMF sees greater chance of a ‘soft landing’ for the global economy” CNN, 10 Oct. 2023, https://www.cnn.com/2023/10/10/economy/imf-world-economic-outlook/index.html
6. “IMF lifts Japan's 2023 growth forecast to 2% on brisk inbound tourism” Kyodo News Plus, 10 Oct. 2023, https://english.kyodonews.net/news/2023/10/be05d986e9e1-imf-lifts-japans-2023-growth-forecast-to-2-on-brisk-inbound-tourism.html
