The International Monetary Fund (IMF) has left its forecast for global economic growth this year unchanged at 3.0% in its latest World Economic Outlook report.
However, the financial agency of the United Nations (U.N.) lowered its 2024 forecast by 0.1 percentage point to 2.9% and cut its growth forecasts for both China and Europe.
Overall, the IMF said that prospects for medium-term growth across the globe are “mediocre” at present, though the conditions for a soft landing remain largely intact.
The IMF did flag risks related to the current real estate crisis in China, volatile commodity prices, geopolitical fragmentation, and the potential for a resurgence in inflation.
Another risk has emerged in the form of the Israel-Palestinian conflict that flared up in recent days, which came after the IMF’s latest economic forecast was completed on September 26.
The IMF noted that the global economy has yet to recover to pre-pandemic levels as issues such as inflation and the ongoing war in Ukraine constrain growth.
Inflation continues to decline around the globe due to a fall in energy prices and to a lesser extent food prices. The IMF sees inflation falling to an annual average of 6.9% in 2023, from 8.7% in 2022, and to 5.8% in 2024.
The IMF raised its forecast for growth in the U.S., the world’s largest economy, by 0.3 percentage points to 2.1% for 2023, and by 0.5 percentage point to 1.5% for 2024.
In China, the economy is expected to expand by 5.0% in 2023 and 4.2% in 2024, reflecting downward revisions of 0.2 and 0.3 percentage points.
The IMF also cut its growth forecast for Europe to 0.7% in 2023 and 1.2% in 2024, down from previous forecasts of 0.9% and 1.5% growth respectively.
