Published: 2023-01-31 10:37
Last Updated: 2023-03-25 08:19
Global growth is set to be higher than expected this year, the International Monetary Fund (IMF) said Monday, raising its forecast on surprisingly strong consumption and investment while China's lifting of zero-COVID restrictions provides another boost.
World growth has been bogged down by fallout from the Russia-Ukraine war last year, economic downturns and efforts to rein in spiraling costs of living.
Against this backdrop, the IMF expects the global economy to expand 2.9 percent this year, slowing from 2022 to a rate that remains weak by historical standards.
But "adverse risks have moderated" since last October's forecast, said the IMF in the latest update to its World Economic Outlook report.
"The year ahead will still be challenging... but it could well represent a turning point with growth bottoming out and inflation declining," IMF chief economist Pierre-Olivier Gourinchas told reporters.
In particular, the IMF sees Germany and Italy avoiding recessions this year, shifting from earlier predictions, as European growth proved "more resilient than expected" despite shocks from the Russia-Ukraine war.
And the fund does not expect global GDP to shrink, with Gourinchas noting "we're well away from any sort of global recession marker."
While the outlook has not worsened this time around, there are still challenges to overcome to reach sustainable recovery, he said.