IMF World Forecast January 2023

The International Monetary Fund (IMF) released its World Economic Outlook on January 31, 2023. The report forecasts global growth for 2023 at 2.9% before rising further to a 3.1% GDP rate in 2024, which represents an upward revision of 0.2 percentage points above the October 2022 estimates. The recent reopening of Chinese borders is expected to pave the way for a faster-than-expected global recovery. Inflation is expected to fall from 8.8% in 2022 to 6.6% in 2023 but will remain above pre-pandemic levels of around 3.5%.

IMF increased the 2023 GDP forecast of the United States by 0.4 percentage points, from 1% to 1.4%. Other advanced economies see their growth improve: IMF revised the estimates for Germany (from -0.3% to 0.1%), Italy (from -0.2% to 0.6%), Japan (from 1.6% to 1.8%), and Canada (stable at 1.5%). The economies that experienced a downtrend in the forecast are Spain by 0.1 percentage points to 1.1%, and the United Kingdom, with a downgrade of 0.9 percentage points, from 0.3% to -0.6%.

The upward trend forecast for 2023 also reflects revisions among a few large emerging markets. The IMF revised China's growth outlook higher for 2023 with an increase of 0.8 percentage points, from 4.4% to 5.2%, meanwhile, India’s forecast remains stable at 6.1%, in line with the previous outlook. For the largest five ASEAN economies (Indonesia, Malaysia, Philippines, Thailand, and Vietnam), growth is projected at 4.3% in 2023.