The International Monetary Fund (IMF) released this Tuesday (31) the update of the World Economic Outlook (WEO), which provides a global overview of the performance of countries’ economies. For 2022, the institution predicts a 3.4% increase in GDP, and 2.9% in 2023. The entity revised its projections for 2023 by 0.2% upwards, but they are still below the average of 3.9% measured between 2000 and 2019.
The report is released twice a year, in April and October, and the entity periodically updates its projections. “The rise in central bank rates to combat inflation and Russia’s war in Ukraine continue to weigh on economic activity. The rapid spread of Covid-19 in China has hurt growth in 2022, but the recent reopening has paved the way for a faster-than-expected recovery,” the report states.
On the inflation side, the IMF forecasts an increase of 8.8% in 2022 and 6.6% in 2023. “On the positive side, a stronger boost from pent-up demand in several economies or a faster decline in inflation are plausible. On the other hand, serious health problems in China could delay the recovery, Russia’s war in Ukraine could escalate, and tighter global financing conditions could worsen the debt problem.”
The IMF researchers believe that the monetary policies of countries that have started to tighten interest rates have started to have an effect, reducing the speed of inflation’s rise, but the full impact will only be seen in 2024. “Global nominal inflation appears to have peaked in the third quarter of 2022. Fuel and non-fuel commodity prices have fallen, but core inflation has not yet peaked in most economies and remains well above pre-pandemic levels.”
GDPs of some countries
GDP growth in the United States is expected to grow by 1.4% in 2023, 0.4% above the forecast made in October 2022; and by 1% in 2024, 0.2% below the previous forecast. That of the euro zone is expected to rise by 0.7% in 2023, 0.2% more than the 2022 forecast; and by 1.6% in 2023, and 0.2% less than the previous forecast.
GDP in Germany is expected to grow by 0.1% in 2023, 0.4% more than the October forecast; and by 1.4% in 2024, 0.1% less than the previous expectation. That of the United Kingdom is expected to contract by 0.6% in 2023, from -0.9% in the previous forecast; and by 0.9% in 2024, 0.3% more compared to the previous projection. Japan is expected to grow 1.8% in 2022 (0.2% more than the 2022 forecast) and 0.9% in 2024 (0.4% less than the previous projection). China is expected to grow 5.2% in 2023, 0.8% more than the 2022 forecast, and 4.5% in 2024, stable compared to the October forecast.
Brazil’s GDP, according to the IMF
Brazil is expected to grow 1.2% in 2023 (0.2% more than the 2022 forecast) and 1.5% in 2024 (0.4% less than the October forecast).
Projection of high inflation
In terms of inflation for advanced economies (the report update does not discriminate the index between countries separately), the IMF projects an increase of 7.3% in 2022 and 4.6% in 2023. In emerging and developing economies, the index will be 9.9% in 2022 and 8.1% in 2023.
Source: Canal Rural