IMF More Pessimistic On Growth, But Not As Much As Others

ICYMI: The IMF revised down its 2023 and 2024 global growth projections in its April World Economic Outlook after revising up 2023 growth in January following China’s reopening. It now expects growth to slow to 2.8% this year from 3.4% in 2022 and then be slightly stronger in 2024 at 3%, below the average of the last 20 years. It stated that the risks are “heavily skewed to the downside”, particularly from recent banking turmoil, and that the risks of a “hard landing” in OECD economies are now a lot larger. But the IMF is more optimistic on the world’s economies than most other global organisations (see chart).

• There is significant uncertainty around the IMF’s outlook as many of the factors that drove 2022 will also be relevant this year, such as tighter monetary policy, the war in the Ukraine, high debt levels, limited fiscal space and commodity price volatility.
• The IMF is expecting very lacklustre growth in advanced economies at 1.3% in 2023 and 1.4% in 2024 with the US at 1.6% and 1.1% and the euro area 0.8% and 1.4% (Germany -0.1% and 1.1%).
• Developing economies are projected to see fairly stable growth around 4% over the forecast horizon. Asia should see a pickup to 5.3% this year from 4.4% driven by China’s reopening. China’s GDP is forecast to strengthen to 5.2% from 3% in 2022 and then a more moderate 4.5% in 2024.
• See IMF forecasts here.

Source: MNI - Market News/IMF/World Bank/OECD