IMF sees global economic growth to fall 3% in 2023 and 2024, states an Engine news source.
Rising in central bank policy rates
The rise in central bank policy rates to curb inflation levels continues to weigh on economic activity, the International Monetary Fund (IMF) stated in its World Economic Outlook Update for July. “While the forecast for 2023 is modestly higher than predicted in the April 2023 World Economic Outlook (WEO), it remains weak by historical standards,” it further stated.
The agency that represents 190 member countries projects global growth to fall from an “estimated 3.55% in 2022 to 3% in both 2023 and 2024”. Additionally, the agency expects global headline inflation to decline from 8.7% in 2022, to 6.8% in 2023 and 5.2% in 2024.
The Ukraine war
“Underlying (core) inflation is projected to decline more gradually, and forecasts for inflation in 2024 have been revised upward,” IMF commented.
The Ukraine war, extreme weather conditions and China’s slow economic recovery are all triggering inflation that could even rise further, the financial agency argued.
“Financial sector turbulence could resume as markets adjust to further policy tightening by central banks,” it added.
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