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Global growth will be better than expected in 2023, according to the IMF

Le Bullish International Monetary Fund (IMF). This Monday, January 30, the IMF published a new report in which it raised its growth forecast for 2023, the economy resisting shocks and repeated crises better than expected. The specter of recession receding for several countries while the reopening of China gives hope for an additional rebound.

The IMF now expects global growth of 2.9% in 2023, according to its report released on Monday. That’s 0.2 percentage points higher than he expected in October, when he released his previous forecast. “The outlook is less gloomy than in our October forecast,” said IMF chief economist Pierre-Olivier Gourinchas during a conference call. “The coming year will remain difficult”, he warned, but “it could also be a turning point”, on the fronts of growth and inflation, specified the economist.

The slowdown looks less significant than expected in several developed economies, particularly in the United States (1.4% growth in 2023, 0.4 percentage point more than in October). This is also the case in Germany or Italy, where the IMF no longer fears a recession, contrary to what it predicted in October. Growth in the euro zone, which is holding up better than expected to the energy crisis linked to the conflict in Ukraine, is thus expected at 0.7%, or 0.2 points more than before.

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Lower inflation than in 2022

The other important factor is the reopening of China after the abandonment of the zero-Covid policy. Despite the chaotic management that has led to a sharp rise in Covid cases in the country, this reopening should allow Chinese growth (+5.2% against 4.4% forecast three months ago) to come and give a boost. accelerator to the global economy.

In addition, inflation, which has climbed to very high levels around the world, is now slowing down, and should be lower in 2023 than in 2022 in the majority of countries, notes the IMF in its report. The Washington institution, however, sees it a little higher this year than it had previously forecast, at 6.6% against 6.5% forecast in October. But it should return in 2024 to levels lower than 2021 (+4.3% against +4.7%).

These figures are more optimistic than those published in mid-January by the World Bank, which saw global growth slow down further. A forecast published before the announcement of the end of the massive containment measures against Covid-19 in China. The parameters taken into account by the two institutions are also different.

The three global locomotives – the United States, China and Europe – are thus showing clear signs of resilience, for various reasons. All of the advanced economies are expected to experience growth, albeit weak, this year. One exception though: the UK is set to be the only G20 country to experience a recession this year, with GDP down around 0.6% (down 0.9 percentage points from forecasts). of October).

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Moscow avoids recession

Conversely, Russia could escape, despite the sanctions imposed by the international community since the invasion of Ukraine, with slightly positive growth in 2023 (+0.3%) and which should even accelerate in 2024 (+2.1%).

Elsewhere in the world, the planned expansion in sub-Saharan Africa (+3.8%, almost unchanged) or in the Middle East and Central Asia (+3.2%, 0.4 points less than in October) is expected to be much higher than in Latin America and the Caribbean, where it will remain below global growth (+1.8%). The two Latin American locomotives, Brazil and Mexico, see their growth forecasts -respectively at +1.2% and +1.7%-, being well below that expected for the other major emerging countries, in particularly China and India (+6.1%).

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For 2024, global growth is expected to reach 3.1%, up from 2023, but with a slight downward revision from October (-0.1 percentage point). For these two years, however, “global growth will remain weak by historical standards,” said the chief economist of the IMF.

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