The International Monetary Fund on Tuesday cut its growth forecasts for China and the euro area and said overall global growth remained low and uneven despite what it called the "remarkable strength" of the U.S. economy. The IMF left its forecast for global real GDP growth in 2023 unchanged at 3.0% in its latest World Economic Outlook (WEO), but cut its 2024 forecast by 0.1 percentage point to 2.9% from its July forecast. IMF chief economist Pierre-Olivier Gourinchas told reporters the global economy continued to recover from the COVID-19 pandemic, Russia's invasion of Ukraine and last year's energy crisis, but growth trends were increasingly divergent across the globe, and prospects for medium-term growth were "mediocre."
The world economy has lost momentum from the impact of higher interest rates, the invasion of Ukraine and widening geopolitical rifts, and it now faces new uncertainty from the war between Israel and Hamas militants, International Monetary Fund warned Tuesday. The deceleration comes at a time when the world has yet to fully mend from a devastating but short-lived COVID-19 recession in 2020 and now could see fallout from the Middle East conflict — particularly to oil prices. A series of previous shocks, including the pandemic and Russia’s war in Ukraine, has slashed worldwide economic output by about $3.7 trillion over the past three years compared with pre-COVID trends.
The IMF kept its 2023 global growth forecast unchanged on Tuesday but warned that the economy is "limping along" as inflation remains high and the outlooks for China and Germany were downgraded.The move could have knock-on effects on growth, but the IMF warned central banks against easing the monetary tightening too soon, adding that it still expects the global economy to have a "soft landing" a slowdown that avoids recession.