By Tom Burnett CFA
On October 11, 2022, the International Monetary Fund (“IMF”) issued its latest ‘Global Prospects and Policies’ Report. The Report contains the latest projections for GDP growth in the major economic regions of the world. The Report also indicates the changes in the projections since the last Report was issued in July.
We summarize the Projections as follows:
World—2021 growth was 6.0% in the recoveries from the Covid-19 outbreak, but the projections for 2022 at 3.2% and 2023 at 2.7% are lower. The 2023 projection is lower by 0.2% from the July projection.
U.S.—2021 growth was 5.7% but the forecasts for 2022 at 1.6% and 2023 at 1.0% are lower. The 2022 figure is 0.1% lower than the July forecast.
EURO Area—2021 growth was 5.2%, but forecasts for 2022 (3.1%) and 2023 (0.5%) are lower. The 2023 figure is lower by 0.7% from the July forecast.
China—2021 growth was 8.1%, but the forecasts for 2022 (3.2%) and 2023 (4.4%) are lower. The 2023 figure is lower by 0.2% from the July projection. The ‘lockdown’ Covid-related policies are thought to have a major negative impact on GDP growth in China.
World Trade—2021 growth was 10.1%, but volumes are expected to slow to 4.9% in 2022 and just 2.5% in 2023. The 2023 figure is 0.7% lower than in the July report.
Looking at inflation, the latest projections are for global price increases of 8.8% in 2022 and 6.5% in 2023. The 2022 figure is now 0.5% higher than the inflation forecast in the July report. Global inflation in 2021 was 4.7%.
The IMF projections will be updated early in 2023, with the April Report summarizing the actual 2022 performance.
Tom Burnett CFA is Director of Research