Washington (EFE).- The International Monetary Fund (IMF) increased its global growth forecasts for this year by two tenths, to 2.9%, and also adjusted the figure for last year upwards, thanks to the “positive surprises” and a “greater-than-expected resilience” that they have shown numerous economies.
“The outlook is less gloomy than in our October forecast,” said the director of research of the IMF, Pierre-Olivier Gourinchas.
Thus, global growth, which according to the IMF was 3.4% in 2022, is expected to grow only 2.9% in 2023, two tenths more than previously forecast, before increasing to 3.1% in 2024 , one tenth less than estimated in October.
“Negative growth in global GDP, which often occurs when there is a global recession, is not expected,” the report notes.
According to Gourinchas, the fund has slightly improved this year’s prospects for four reasons.
The first, that he economic growth It turned out “surprisingly resilient” in the third quarter of 2022, thanks to a robust labor market, domestic consumption and business investment, and also due to the “better than expected” adaptation to the energy crisis in Europe.
The second is that inflation has begun to show signs of improvement, as it is declining in most countries.
In third place is the reopening of China after the end of its zero covid policy, and in fourth, the fact that “financial conditions improved as inflationary pressures began to subside” and “this led to a weakening dollar.” , which has brought some relief to emerging and developing countries.
However, the 2023 data is not at all to celebrate and is driven, says the IMF, by the sharp drop in growth in advanced economies, reflecting the increase in interest rates by central banks to combat the inflation, as well as the consequences of the war in Ukraine.
A MORE FRAGMENTED WORLD
The war in Ukraine and the international sanctions against Russia will also bring, warns the IMF, a greater division of the world economy and will reinforce “previous geopolitical tensions”, including the trade dispute between the US and China.
In emerging market and developing economies, growth is estimated to have bottomed out in 2022 and a less gloomy outlook has been drawn for 2023, partly thanks to the reopening of China, which will grow 5.2% this year (eight tenths more than previously estimated), compared to the 3% growth in 2022.
Thus, the IMF estimates that the euro area will grow only 0.7% in 2023 (two tenths more than estimated in October) and 1.6% in 2024 (two tenths less). Spain will be one of the economies that resists the best, although it will only grow 1.1% in 2023 and 2.4% in 2024.
For its part, the United States will grow 1.4% in 2023 (four tenths more than previously estimated) and only 1% in 2024 (two tenths less).
Latin America and the Caribbean will record growth of 1.8% in 2023 (one tenth more) and 2.1% in 2024 (three tenths less).
RATE RISES ARE BEGINNING TO TAKE EFFECT
In the opinion of the organization, there are “obvious signs” that the tightening of monetary policy is beginning to cool demand and inflation, although the greatest impact of the increases will be seen in 2024.
Thus, headline global inflation peaked in the third quarter of 2022 and then began a downward path. The global estimate for 2022 is 8.8%, by 2023 it is expected to drop to 6.6% and in 2024 it will drop to 4.3%.
This will be a consequence of the decrease in international prices of fuels and other raw materials due to weaker global demand, says the IMF, which still sees high underlying inflation as a serious problem.
The agency believes that it is prudent for banks to continue raising interest rates, although it points out that “a gradual and constant fiscal adjustment” would help cool demand and limit the burden on monetary policy in the fight against inflation.
RISKS THAT COULD AFFECT GROWTH
In its report, the IMF points out a number of risks that could cause these outlooks to change downward, eventually leading the world economy into recession.
Among them is an escalation of the war in Ukraine, but we must also look closely at China and its economic recovery, since the “low levels of immunity of the population and insufficient hospital capacity” could lead to “indirect effects” in the rest of the world, due to lower demand or new problems in the global supply chain.
The IMF also points out indebtedness as a risk, since it estimates that 15% of low-income countries have over-indebtedness, a situation to which another 45% of those countries are exposed and another 25%, if you look at the economies of emerging markets. EFE
