IMF cuts global economic growth forecasts

The IMF published the April 2023 issue of the World Economic Outlook Report with the title “A Challenging Recovery”. In the report, it was stated that the uncertain signs in early 2023 that the world economy could make a “soft landing” were diminished by the persistently high inflation and the recent turmoil in the financial sector. In the report, which pointed out that inflation decreased with the increase in interest rates by the central banks and the decrease in food and energy prices, it was noted that the basic price pressures appeared “sticky” with the tightness in the labor markets in some economies. In the report, it was stated that the side effects of the rapid increase in policy rates became evident as fragilities in the banking sector became the focus and fears of its wider spread in the financial sector, including non-bank financial institutions.

“Risks to the downside” warning

It was also noted in the report that debt levels continue to remain high and that this situation limits the ability of policy makers to respond to new challenges. In the report, it was pointed out that commodity prices, which had risen rapidly after Russia’s war in Ukraine, eased, but the war continued and geopolitical tensions were high. “The risks are firmly on the downside amid increased uncertainty with the recent turmoil in the financial sector, despite positive developments stemming from falling food and energy prices and improved supply chain functioning,” the report said. it was said.

The global economic growth rate is projected to stabilize at 3 percent in 5 years.

In the IMF’s report, it was noted that the world economy, which was estimated to have grown by 3.4 percent last year, is expected to grow by 2.8 percent this year and 3 percent in 2024. In the forecasts of the IMF published in January, it was predicted that the world economy would grow by 2.9 percent in 2023 and 3.1 percent in 2024. The report stated that the global economic growth rate is expected to stabilize at 3 percent in 5 years, which is the lowest medium-term growth forecast since 1990. In the report, it was stated that global inflation is expected to decrease from 8.7 percent in 2022 to 7 percent in 2023 due to low commodity prices.

Turkey’s growth expectation increased for 2024

In the report, it was noted that the Turkish economy is expected to grow by 2.7 percent this year and 3.6 percent in 2024. In the forecasts of the IMF in January, it was predicted that the Turkish economy would grow by 3 percent each in 2023 and 2024. In the report, which also includes inflation forecasts for Turkey, it was stated that the year-end inflation forecast, which was 72.3 percent in 2022, is expected to decline to 50.6 percent in 2023 and 35.2 percent in 2024. In the report, it was reported that the unemployment forecast for Turkey was 11 percent for 2023 and 10.5 percent for 2024.

Growth of advanced economies expected to slow down

Pointing out that a significant slowdown is expected in the growth of developed economies, the report noted that the US economy, which was estimated to have grown by 2.1 percent last year, is expected to grow by 1.6 percent this year and 1.1 percent in 2024. In the IMF’s forecasts in January, it was predicted that the US economy would grow by 1.4 percent this year and 1 percent in 2024. In the report, it was stated that the growth rate of the Eurozone economy, which was estimated to be 3.5 percent last year, is expected to decline to 0.8 percent this year, and that the region’s economy is expected to grow by 1.4 percent in 2024. In the IMF’s forecasts in January, it was predicted that the Eurozone economy would grow by 0.7 percent this year and 1.6 percent next year. In the report, it was stated that the German economy, which was predicted to grow by 0.1 percent this year, is expected to shrink by 0.1 percent in 2023, while the growth forecast for the French economy is maintained as 0.7 percent for this year. The report noted that the growth expectation for Italy was increased from 0.6 percent to 0.7 percent this year, and it was reported that the growth forecast for Spain was increased from 1.1 percent to 1.5 percent. In the report, the growth forecasts for the next year changed from 1.4 percent to 1.1 percent for Germany, from 1.6 percent to 1.3 percent for France, and from 0.9 percent to 0.8 percent for Italy. It was stated that it was reduced from 2.4 percent to 2 percent for e and Spain. In the report, it was reported that the UK economy, which was previously predicted to contract by 0.6 percent this year, is expected to shrink by 0.3 percent, and the growth forecast of the country’s economy for 2024 was increased from 0.9 percent to 1 percent. In the report, it was noted that with these revisions, the growth expectations for the developed countries group were increased from 1.2 percent to 1.3 percent for 2023, while it was preserved as 1.4 percent for 2024.

China’s economy is expected to grow 5.2 percent this year

In the report, which also includes the growth forecasts of emerging markets and developing countries, it is stated that China’s economic growth expectation for this year is 5.2 percent and its 2024 growth forecast is 4.5 percent. In the report, where the growth expectation of the Indian economy was reduced from 6.1 percent to 5.9 percent this year and from 6.8 percent to 6.3 percent next year, the growth forecast for the Russian economy was 0 percent for this year. It was stated that while it was increased from 0.3 to 0.7 percent, it was reduced to 1.3 percent from 2.1 percent for the next year. In the report, it was stated that with these revisions, the growth expectation for emerging markets and developing countries was reduced from 4 percent to 3.9 percent for 2023 and maintained as 4.2 percent for 2024.