The chief economist of the International Monetary Fund has said the prospects for medium-term global economic growth are “mediocre” in the organization’s latest World Economic Outlook.
Speaking at the document’s launch in the Moroccan city of Marrakech on Tuesday, where delegates from 190 countries have gathered for the annual meetings of the IMF and World Bank, chief economist Pierre-Olivier Gourinchas said there was a continued global economic recovery from the pandemic, the outbreak of conflict in Ukraine and the subsequent energy crisis, but an increasingly divergent global picture was emerging.
The baseline forecast is for global growth to slow from 3.5 percent in 2022 to 3.0 percent in 2023 and 2.9 percent in 2024.
“The global economy is showing resilience,” he said during the press meeting. “It’s not knocked out by the big shocks it’s experienced in the last two or three years, but it’s not doing too great either. We see a global economy that is limping along and it’s not quite sprinting yet.”
The latest quarterly outlook was finalized on Sept 26, before the recent outbreak of conflict in Israel and Gaza, a situation the outcome of which is still so unclear that Gourinchas said it was impossible to quantify its impact.
“Depending how the situation might unfold, there are many very different scenarios that we have not even yet started to explore, so we can’t make any assessment at this point yet,” he conceded.
The IMF raised its forecast for US growth to 2.1 percent for 2023, and to 1.5 percent for next year.
The report said China’s GDP is expected to expand by 5.0 percent in 2023 and 4.2 percent in 2024.
The IMF cut its estimates for eurozone growth to 0.7 percent in 2023 and 1.2 percent in 2024.
Rising interest rates and extreme weather events were mentioned as other factors contributing to overall global output for 2023 which is slated to be 3.4 percent lower than projections from before the pandemic, with the longer-term outlook barely any more optimistic.
The IMF’s projected growth figure for 2028, 3.1 percent, remains well below the 4.9 percent five-year forecast made just before the financial crisis of 2008-09.
“You have uncertainty. You have geoeconomic fragmentation, low productivity growth, and low demographics,” explained Gourinchas.
“You put all these things together and you have a slowdown in medium-term growth.”
The IMF sees global consumer price inflation dropping from 8.7 percent in 2022 to 6.9 percent this year and 5.8 percent in 2024.
The IMF again expressed concern that the countries of the world were breaking into geopolitical blocs that could limit international trade and economic growth globally.
Agencies contributed to this story.