The International Monetary Fund (IMF) released the January update to its World Economic Outlook on Tuesday. According to the update, India’s GDP will slow from 6.8 percent in 2022 to 6.1 percent in 2023 before rising to 6.8 percent in 2024, thanks to solid domestic demand despite external obstacles.
According to the IMF’s January release, global growth of 3.4 percent in 2022 is expected to decline to 2.9 percent in 2023 before rebounding to 3.1% in 2024.
The estimate for 2022 and projection for 2023 are both roughly 0.2 percentage point higher than the October forecast, indicating good surprises and stronger-than-expected resilience in a number of economies. It also stated that negative growth in global GDP or global GDP per capita, which is common during global recessions, is not predicted. Nonetheless, global growth projections for 2023 and 2024 are lower than the historical (2000-19) yearly average of 3.8%.
The projection for poor growth in 2023 reflects both the hike in central bank rates to combat inflation, particularly in advanced nations, and the war in Ukraine.
The fall in growth from 2022 to 2023 is being driven by advanced economies; growth in emerging market and developing economies is expected to have peaked in 2022.
According to the update, China’s growth will accelerate with the full reopening in 2023. The predicted rebound in both categories of economies in 2024 reflects a gradual recovery from the effects of the Ukraine war and declining inflation. Following the direction of global demand, world trade growth is likely to fall to 2.4% in 2023, despite easing supply bottlenecks, before recovering to 3.4% in 2024, according to the IMF.
According to the IMF, growth in emerging and developing Asia is predicted to rise to 5.3% and 5.2% in 2023 and 2024, respectively, following a deeper-than-expected decline in 2022 to 4.3% due to China’s economy.
According to the report, growth in China is expected to reach 5.2% in 2023, indicating significantly improving mobility, before falling to 4.5% in 2024 and settling at less than 4% in the medium term due to waning economic dynamism and weak progress on structural changes.
