Global economy to slow to 3.1% in 2023 amid various challenges: Report

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Oct 30, 2023

The global economy will slow to 3.1% in 2023 as monetary policy tightening, the war in Ukraine, and lingering effects of the COVID-19 pandemic continue to affect growth, as per a report. The world’s economy will remain weak in 2024 with global gross domestic product expanding 3.1%.

Global consumer prices will fall to 7 per cent this year, down from 9.2% in 2022 and inflation will drop further to 5.8% in 2024, according to the IFF Global Finance and Development Report 2023.

Looking ahead, global economy still faces strong headwinds—core inflation in many countries still stay well above central banks’ targets as geopolitical issues including the war in Ukraine could further rock global energy and food markets; monetary policy tightening in an effort to rein in inflation could further dampen demand; geopolitical tensions could further trigger economic slowdown and runaway inflation; and the uncertainty of China’s economic growth momentum this year could have a negative impact on global growth.

The report recommends monetary policy tightening without sacrificing global financial stability, consolidating fiscal position while protecting vulnerable groups, accelerating structural reform, deepening international cooperation, and promoting multilateralism.

US’ economy is to expand 2% in 2023 while the European Union’s GDP is projected to grow 0.8% this year and 1.5% in 2023.

China’s GDP is projected to grow 5.2% in 2023 and slow to 5% in 2024 as the country rolled out a series of stimulus packages.

Vulnerabilities in China’s financial system are unlikely to escalate into systematic risks, the report added.

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