BAKU, Azerbaijan, October 12. Global economic growth is set to slow down to 2.7 percent in 2023, Trend reports via the latest World Economic Outlook from the International Monetary Fund (IMF).
“This is the weakest growth profile since 2001 except for the global financial crisis and the acute phase of the COVID-19 pandemic and reflects significant slowdowns for the largest economies: a US GDP contraction in the first half of 2022, a euro area contraction in the second half of 2022, and prolonged COVID-19 outbreaks and lockdowns in China with a growing property sector crisis,” the report said.
According to the report, IMF gas downgraded the current 2023 projections by 0.2 percentage points, compared to the July forecast. At the same time, there is a 25 percent probability that global economy may fall below 2 percent.
Meanwhile, the IMF’s forecast for global GDP growth in the current year remained unchanged at 3.2 percent - a drop, compared to 6 percent in 2021.
“More than a third of the global economy will contract this year or next, while the three largest economies - the US, the EU, and China - will continue to stall. In short, the worst is yet to come, and for many people 2023 will feel like a recession,” the report said.
As the IMF pointed out, Russia-Ukraine war continues to powerfully destabilize the global economy.
“It has led to a severe energy crisis in Europe that is sharply increasing costs of living and hampering economic activity. Gas prices in Europe have increased more than four-fold since 2021, with Russia cutting deliveries to less than 20 percent of their 2021 levels, raising the prospect of energy shortages over the next winter and beyond. More broadly, the conflict has also pushed up food prices on world markets, despite the recent easing after the Black Sea grain deal, causing serious hardship for low-income households world- wide, and especially so in low-income countries,” the report noted.