IMF says global economy 'limping along'
The International Monetary Fund (IMF) has lowered growth projections for both China and the euro area, underscoring persistent global economic challenges. Despite acknowledging the 'remarkable strength' of the US economy, the IMF emphasized that global growth remains sluggish and uneven.
The IMF's forecast for global real GDP growth in 2023 remains unchanged at 3.0%. However, it has revised down its 2024 projection by 0.1 percentage point to 2.9% compared to its July estimate. Notably, the world economy expanded by 3.5% in 2022.
IMF's Chief Economist, Pierre-Olivier Gourinchas, conveyed to reporters that the global economy is still on the path to recovery following the impact of the COVID-19 pandemic, Russia's invasion of Ukraine, and last year's energy crisis. However, Gourinchas stressed that growth trends are diverging significantly worldwide, and the outlook for medium-term growth remains 'mediocre.'
While the forecasts generally suggest a gradual economic slowdown, the IMF remains vigilant about several risks. These include concerns related to the real estate crisis in China, volatile commodity prices, geopolitical tensions leading to fragmentation, and a resurgence in inflation.
Adding to the list of uncertainties is the unexpected emergence of the Israel-Palestinian conflict. This development coincided with the annual meetings of the International Monetary Fund and World Bank in Marrakech, where finance officials from 190 countries convened. Notably, the IMF's quarterly outlook update had already been finalized on September 26, making it unable to incorporate this new geopolitical development into its assessment.
The IMF's cautious outlook underscores the importance of continued international cooperation and policy responses to address these challenges and promote global economic stability and growth.
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