The International Monetary Fund said in its updated World Economic Outlook on Tuesday that global growth is slowing down more than previously thought.
World output is set to grow by 2.9 percent this year, down from 3.4 percent in 2022, weighed down by tightening monetary policy and the war in Ukraine.
This is an increase of 0.2 percentage points as compared to the figures of 2.7 percent and 3.2 percent. predicted in octoberThanks to stronger than expected growth in the third quarter of 2022.
Growth will resume at 3.1 percent in 2024.
“This time, the global economic outlook has not worsened,” Pierre-Olivier Gaurinchas, the IMF’s chief economist and director of research, wrote in a blog post. “That’s good news, but not enough.”
Eurozone growth is expected to reach 0.7 percent this year — a 0.2 percentage-point upgrade — and 1.6 percent next. In 2022, the IMF revised eurozone growth upward to 3.5 percent from 3.1 percent earlier, due to lower energy prices and additional demand-side support measures.
The fund said global headline inflation peaked in the third quarter of last year, pushed down by a fall in commodity prices. But so-called core inflation, which excludes volatile energy and food prices, has yet to peak, driven by tight labor markets that generate strong wage growth.
The IMF expects global inflation to decline to 6.6 percent this year and 4.3 percent in 2024, down from an average of 8.8 percent in 2022. Both headline and peak inflation are expected to exceed pre-pandemic levels in 2024.