IMF raises outlook as global economy looks to avoid recession
The IMF upgraded its outlook for the year on Monday, saying that it still expects the global economy to slow, but that it will likely avoid a recession. The multilateral highlighted resilient US consumer spending and an economic rebound from China’s reopening as reasons for its upgrade. While it expects central banks to continue raising interest rates, the fund sees inflation peaking in the near term.
The IMF projected global economic output growth to shrink to 2.9% in 2023 from 3.4% last year, before bouncing back to 3.1% in 2024. It expects inflation to fall to 6.6% this year from 8.8% last year, and to decrease further to 4.3% in 2024.
The projections mark an about-face for the international lender, which said in October that one-third of the world’s economy could be in a recession this year. It also contrasted with a recent downgrade in outlook from the World Bank, which predicted three weeks ago that growth would shrink to 1.7% this year as part of a long-lasting slowdown that would hammer low-income countries.