The International Monetary Fund (IMF) has projected a slight improvement in global economic growth, with an estimated 3% growth rate expected in 2023 and 2024.
This represents a 0.2% increase from the organization’s previous projections. Despite this modest growth, the IMF warns that “many challenges still cloud the horizon,” and global growth remains weak by historical standards.
The IMF’s chief economist, Pierre-Olivier Gourinchas, noted that while there are signs of progress, the global economy still faces significant challenges. Inflation is expected to decline from 8.7% in 2022 to 6.8% in 2023 and 5.2% in 2024.
However, the organization cautions that risks such as Russia’s invasion of Ukraine and extreme weather events could lead to higher inflation and prompt central banks to raise interest rates.
The IMF also highlighted the resilience of the US economy, which has defied expectations despite higher borrowing costs.
The US economy has added 278,000 jobs per month this year, and the unemployment rate remains near a half-century low of 3.6%.
The Federal Reserve is set to make a decision on interest rates this week, aiming to achieve a “soft landing” by curbing inflation without triggering a deep recession.
Meanwhile, China’s economic recovery has shown signs of slowing down, and the IMF warns that this could have implications for global growth.
As the global economy navigates these challenges, the IMF’s projections serve as a reminder of the need for continued vigilance and careful economic management.
