IMF Upgrades Global Economic Outlook for 2023

The International Monetary Fund or The IMF have upgraded its global economic outlook, China eases its zero-covid policies and the world shows surprising resilience in the face of high inflation, elevated interest rates and Russia's ongoing war against Ukraine.

In a recent press conference in Singapore, The IMF Chief Economist Pierre Olivier Gourinchas said, that “global conditions have improved as inflation pressures started to abate and that the road back to a full recovery with sustainable growth, stable prices and progress for all has only started".

Such statements are a stark contrast, to the warnings that IMF chief, Kristina Georgiva made earlier in the year, in which she said that one third of the world economy is expected to go into recession.

With this brighter outlook, The IMF is now forecasting the global economy to grow by 2,9% this year, better than the previous forecast of 2,7%, made last October. A big factor in the upgrade to global growth was China’s decision late last year, to lift anti-virus controls that had kept millions of people at home.

The IMF now expects China's economy, the world’s second-biggest after The United States to grow 5.2% this year, up from its October forecast of 4.4%. The US economic growth forecast was also upgraded to 1,4% from the previous 1%.

Russia's economy, hit by sanctions after its invasion of Ukraine, has proved sturdier than expected too As The IMF forecasts Russia to register 0.3% growth this year, marking an improvement from the previous forecast of 2.3% contraction.

The United Kingdom is however, a striking exception to the imf's brighter outlook for 2023. The IMF is forecasting that the uk economy will shrink by 0.6% in 2023, In October, The IMF had expected growth of 0.3%. According to The IMF, higher interest rates and tighter government budgets are squeezing The British economy.

Global inflation is also expected to ease to 6,6% this year, down from the 8,8 percent in 2022.