what to remember about the global growth forecast for 2023

Global growth for the year 2023 looks gloomy. In its autumn report on the economy, presented on Tuesday, October 11, the International Monetary Fund (IMF) forecasts a risk of recession in several developed countries and economic growth undermined by war and inflation.

► Weaker-than-expected global growth

The IMF again lowered its growth forecast for 2023, this time to 2.7%, 0.2 points less than the previous revision in July. The report points out that, “with the exception of the 2008 financial crisis and the acute phase of the pandemic, this is the weakest growth expected since 2001, and it reflects the slowdown of the main economies” – United States, Europe and China for different reasons.

► Persistent inflation

At the center of the difficulties, persistent inflation, affecting advanced economies but, even more so, emerging and developing countries, and which should reach 8.8% on average worldwide this year (+ 0.5 points compared to forecasts) of July). On a positive note, however: global inflation should have peaked in the third quarter (9.5%) and start to decline from the last quarter of 2022.

► Inevitable recession in Germany and Italy

The economic slowdown will affect all of the richest states, starting with the United States: growth there has been revised to just 1.6% in 2022, against 2.3% expected in July. 2023 could be even more difficult, the Fund expects 1%.

In the euro zone, the situation is not much better. In Germany and Italy, very vulnerable to shocks on the gas market and where the explosion in energy prices is giving companies in the industrial sector a hard time, recession seems inevitable next year (respectively – 0, 3% and – 0.2%). For its part, France can hope to stay above the waterline, with growth of 0.7%.

► 2022, the worst year for China for forty years

China, the world’s second largest economy, should for its part experience in 2022 its worst year for more than forty years, if we exclude the pandemic in 2020, with an expected growth of just 3.2%, before starting up again slightly. in 2023 (4.4%).

In question, the repeated confinements caused by the zero tolerance policy vis-à-vis the Covid-19 which affected several cities in the country, starting with its economic pole, Shanghai, closed for more than a month.

► Russia suffers from its military offensive in Ukraine

Russia, whose economy is bearing the brunt of the sanctions put in place in particular by the United States and the European Union after the invasion of Ukraine, will experience a recession this year, but the situation should be less marked than envisaged at the beginning of the summer. The IMF now forecasts a contraction of 3.4% for 2022, but this is 2.6 points better than the estimates of last July.

The institution details in its report that “The contraction of the Russian economy is less severe than expected, reflecting the resilience of crude oil exports and domestic demand with increased support from fiscal and monetary policies and a restoration of confidence in the financial system.”

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