Finding that the global economy is better than expected weathering recurring shocks, the International Monetary Fund revised its 2023 growth forecast upward, estimating that the specter of a recession is receding for a number of countries, especially in the eurozone, while the recent full , the opening of China’s economy raises hopes for additional momentum.

The IMF now forecasts global economic growth of 2.9% in 2023, according to its latest report released late Monday night. This is 0.2 percentage points higher than the previous forecast released by the Washington-based international financial institution in October.

“The outlook is less bleak than our projections in October,” IMF chief economist Pierre-Olivier Gourance said during a conference call with reporters.

He warned that this year “will remain difficult” but nevertheless “may” prove to be a “turning point” before growth picks up in 2024 and inflation “slows down”.

The slowdown in activity is reported to be less severe than expected in a number of advanced economies, especially the US (expected to grow 1.4% in 2023, up 0.4% from October).

But in both Germany and Italy, the IMF is no longer afraid of the onset of a recession, contrary to estimates it published in October. Growth in the euro area, which weathered the energy crisis better than expected due to the war in Ukraine, is thus expected at 0.7% (+0.2% compared to the previous forecast).

An important factor is the full reopening of the Chinese economy after the abrupt end of the zero-COVID policy in December. Despite its chaotic management and a significant increase in coronavirus infections in China, the decision is expected to boost the Chinese economy (to 5.2% from 4.4% forecast three months ago), giving a boost to the global economy. IMF.

In addition, inflation, which has risen to very high levels more or less globally, is now slowing down and is expected to be lower in 2023 than in 2022 in most countries, again in line with the Fund’s projections.

However, the Washington Institute predicts that it will be higher than it said in October, which will reach 6.6% (up from 6.5%). However, he estimates that in 2024 it will return to levels below the level of 2021 (4.3% vs. 4.7%).

These figures are more optimistic than the World Bank data released in the middle of the month, predicting a further slowdown in global growth. But these forecasts were prepared before the end of the restrictive measures to prevent the spread of the pandemic in China. In addition, the parameters taken into account by the two institutions differ.

Recession in the UK

The three engines of the world economy – the US, China and Europe – are showing clear signs of resilience for different reasons in each case. And in general, developed economies are expected to see record growth this year, albeit a weak one.

Exception: The UK is expected to be the only G20 country to experience a recession this year, with an expected 0.6% contraction in GDP (slightly better than the 0.9% discussed in October).

Conversely, Russia may avoid a recession despite international sanctions after its army invaded Ukraine, recording a modest growth in 2023 (0.3%), which the IMF predicts will even accelerate in 2024 (+2, 1%).

Elsewhere in the world, rapid growth is forecast in Sub-Saharan Africa (3.8%, almost unchanged from October) and the Middle East and Central Asia (3.2%, down 0.4% from the forecast). % compared to October), which is much higher than in Latin America. and the Caribbean, where it is expected to be below the global average (1.8%).

For the two engines of the Latin American economy, Brazil and Mexico, growth forecasts (1.2% and 1.7% respectively) are significantly lower than those of other major emerging economies, especially China and India (6.1%).

Global growth is expected to reach 3.1% in 2024, slightly lower than forecast in October (-0.1%).

This year and next, “global growth will remain low compared to historical norms,” ​​the IMF chief economist concluded.

Source: RES-IPE