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IMF expects drop in global GDP growth - updated forecast

Economy Materials 31 January 2023 10:47 (UTC +04:00)
IMF expects drop in global GDP growth - updated forecast
Maryana Ahmadova
Maryana Ahmadova
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BAKU, Azerbaijan, January 31. Global GDP growth in 2023 is expected to drop from an estimated 3.4 percent in 2022 to 2.9 percent, then increase to 3.1 percent in 2024, Trend reports via the latest updated on the World Economic Outlook (WEO) from the International Monetary Fund (IMF).

The forecast for 2023 is 0.2 percentage point higher than in the October 2022 WEO, but below the historical (2000–19) average of 3.8 percent, the report said.

"The rise in central bank rates to fight inflation and Russia’s war in Ukraine continue to weigh on economic activity. 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, still above pre-pandemic (2017–19) levels of about 3.5 percent," the IMF said.

At the same time, the balance of risks is still shifted downward, but adverse risks have declined since October 2022 WEO.

"On the upside, a stronger boost from pent-up demand in numerous economies or a faster fall in inflation are plausible. On the downside, severe health outcomes in China could hold back the recovery, Russia’s war in Ukraine could escalate, and tighter global financing conditions could worsen debt distress. Financial markets could also suddenly reprice in response to adverse inflation news, while further geopolitical fragmentation could hamper economic progress," the IMF added.

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