IMF cuts global growth outlook to 2.7% for 2023 amid global crisis

The International Monetary Fund (IMF) predicts that global growth is expected to slow to 2.7 per cent in 2023 due to the fallout from Russia's invasion of Ukraine, the cost of living crisis and China's economic slowdown. It also anticipates that the next year will feel like a recession for millions around the world.

It is 0.2 percentage points lower than the July forecast. The IMF said that aside from the global financial crisis and the peak of the Covid-19 pandemic, this is “the weakest growth profile since 2001”. Their GDP estimate for this year remains steady at 3.2 per cent, which has gone down from the 6 per cent seen in 2021.

"The worst is yet to come, and for many people, 2023 will feel like a recession," said IMF economic counsellor Pierre-Olivier Gourinchas in its latest World Economic Outlook that was published on Tuesday. The report also added that the three largest economies the United States, the European Union and China will continue to stall.

The IMF in its report anticipates global inflation to peak in late 2022, increasing to 8.8 per cent from its earlier 4.7 per cent. Global inflation will likely decrease to 6.5 per cent in 2023 and will continue to go down to 4.1 per cent by 2024.