By Tom Burnett CFA
On April 11, 2023, the International Monetary Fund (“IMF”) issued its updated projections for the World Economic Outlook in 2023 and 2024. The Outlook sees renewed progress in bringing down global inflation, but it has also reduced its expectations for global growth in 2023 and 2024. The April update builds upon the forecasts made in January 2023.
The World GDP growth rate this year is now projected at 2.8%, compared to growth of 3.4% in 2022. The latest projection is down from 2.9% in the January forecast. World growth is now expected to reach 3.0% in 2024, down from a forecast of 3.1% in the January forecast.
The U.S. GDP growth rates for 2023 and 2024 are 1.6% and 1.1% respectively, following growth of 2.1% in 2022. The U.S. is expected to avoid falling into a recession, but growth prospects remain limited as the Federal Reserve raises interest rates to bring down inflation.
The EU is now projected to show GDP growth of just 0.8% this year rising to 1.4% in 2024. The EU growth rate in 2022 was 3.5%
China is expected to report good GDP growth in 2023 and 2024. Growth in China is now thought to reach 5.2% in 2023 and 4.5% in 2024, following growth of only 3.0% in 2022 (the result of the Covid-related lockdown of the local economy).
World trade volumes are now forecast to grow by only 2.4% this year, after recovering to grow at 5.1% in 2022. Trade volumes are projected to grow by 3.5% in 2024.
Consumer price inflation is now expected to moderate, primarily in the Advanced Economies where prices rose by 7.3% in 2022 and are currently projected to rise by 4.7% in 2023 and by 2.6% in 2024.
All data taken from IMF World Economic Outlook, April 11, 2023.
The next World Economic Outlook report will be issued in early October 2023.
Tom Burnett CFA is Director of Research