In the framework of the spring meetings of the International Monetary Fund (IMF) and the World Bank, the IMF lowered the growth forecast for the global economy to 2.8% in 2023 and expects 3% over the next five years, which was considered the lowest “in decades”.
(See: Interest rates will only fall when inflation does: IMF).
If it is assumed that the different tensions in the financial sector are contained, the growth of the world economy “cIt fell from 3.4% in 2022 to 2.8% in 2023 before slowly rising and settling at 3% for five years”, says the IMF.
However, the World Bank raised its outlook to 2%, compared to 1.7% in January, due to greater Chinese expansion, explained its president, David Malpass.
The IMF described this perspective as “anemic”, and assured that the situation is a reflection of the rise in interest rates and the strict policies necessary to reduce inflation, in addition to the consequences of the war between Russia and Ukraine.
(See: IMF lowers outlook for economic growth in Colombia).
Despite everything, andhe IMF revised upwards its growth forecasts this year for the United States, the largest economy in the world, up to 1.6%, being 0.2 percentage points (pp) above those published in January, and placed that of 2024 at 1.1%.
Compared to the euro zone, the data improved to 0.8%, that is, 0.1 points more, like the United Kingdom, which will end the year in recession but at a better level than expected, with a contraction of 0.3% Germany is also exposed to falling into recession (-0.1% in 2023), while Spain is faring better with forecast growth of 1.5% in 2023 and 2% in 2024.
(See: The hope of growth of the ‘poor countries’ is almost nil).
In turn, Oxford Economics chief economist Innes McFee said the IMF’s conclusion is too optimistic. “Underestimates the impact of monetary tightening in advanced economies“, said.
In the same lines, after abandoning the ‘zero covid’ policy, The Chinese economy will grow 5.2% in 2023, but it will slow down from 2024 to 4.5%, a very low percentage for the country. “There are risks to China’s economy in particular from the real estate sector. The reopening is also marked by an increase in consumption but not as high as what we have seen in other countries”, detailed the chief economist of the IMF.
According to IMF forecasts, the region, including the Caribbean, will grow 1.6% by 2023 and will increase the figure for 2024 to 2.2%. It should be noted that in the breakdown by country, it is estimated that growth for Brazil this year will be 0.9%, while Mexico will have 1.8%, as well as Argentina 0.2% and Bolivia 1.8%.
(See: Central banks must intensify measures against inflation: IMF).
For its part, Ecuador will grow 2.9%, Paraguay 4.5%, Peru 2.4%, Uruguay 2% and Venezuela 5%. Central America will grow 3.8% and the Caribbean 9.9%. In turn, Chile’s economy will contract this year by 1%.
It should be noted that in the case of Colombia, its economy will grow by 1%, being an extremely lower percentage than the increase in the economy forecast for 2022, which was 7.5%.
The IMF pointed out that the increase in interest rates has secondary effects that for the Fund are “worrisome”. IMF chief economist Pierre-Olivier Gourinchas said: “We have emphasized that the fight against inflation will not be an easy path to follow”.
However, it is assured that inflation will remain high in 2023, around 7% worldwide, but underlying inflation is more worrying, which excludes more volatile elements such as food and energy.
PORTFOLIO AND AGENCIES
