Global growth is set to be stronger than expected this year, the IMF said on Monday, raising its forecast of surprisingly strong consumption and investment, while China’s lifting of zero-covid restrictions provides further support.
The International Monetary Fund expects the global economy to grow 2.9 percent this year and slow from 2022 to a pace that remains weak by historical standards, it said in its latest World Economic Outlook update.
“The year ahead will still be challenging … but could well represent a turning point where growth bottoms out and inflation declines However, adverse risks have eased since the October forecast,” IMF chief economist Pierre-Olivier Gourinchas told reporters.
While China’s easing of coronavirus restrictions paves the way for a faster-than-expected recovery, inflation-fighting central bank rate hikes and Russia’s war in Ukraine continue to weigh on economic activity, a Washington-based crisis lender said in a report.
The fund now sees Germany and Italy avoiding recession as European growth has proved “more resilient than expected” despite the war in Ukraine. But she warned that the slower growth this year is driven by advanced economies. Growth in the US is expected to fall to 1.4 percent in 2023, and growth in the euro zone is expected to fall to 0.7 percent, while the UK economy shrinks.
