In its newest global economic forecast, the International Monetary Fund has cut its estimates of global growth for 2023 to 2.7%. That’s down from the 2.9% forecast in July for 2023 and the 3.8% prediction in January. The fund also said that it sees a 25% chance that growth will slow to less than 2% in 2023.
“The worst is yet to come, and for many people 2023 will feel like a recession,” chief economist, Pierre-Olivier Gourinchas, wrote in the report. “As storm clouds gather, policymakers need to keep a steady hand.”
For this year, the IMF sees world growth of 3.2%, unchanged from July but down from the 4.4% projected in January before the Russian invasion of Ukraine.
Europe remains a focus of worry. The International Monetary Fund sees the EuroZo9ne economy growing by just 0.5% in 2023. Germany, Italy, and Russia all will see their economies shrink.
Inflation will peak later this year, the IMF forecast, with an annual rate of 8.8%, but will remain elevated for longer than previously expected, only slowing to 6.5% in 2023 and 4.1% by 2024.
