IMF: Global Economy Growth at Risk
The International Monetary Fund (IMF) released its World Economic Outlook on Tuesday 11th, April. Their forecast about the fiscal year 2023 is the slowdown of the global economic growth from 3.4% in 2022 to 2.8%.
But this is just the start of it. According to the IMF, if the banking crisis that started in the USA with the fall of Signature Bank, Silvergate Bank and Silicon Valley Bank continues, things might be even worse with an expected global Gross Domestic Product (GDP) growth of just 2.5%.
More Problems to the Equation
Of course the financial sector crisis is not the only problem that the world economy has to face.
The world average inflation rate is expected to stand at 7%, lower than the 2022's 8.7%, but still high enough, taking into consideration that throughout the period 2017-2021 it never got over 3.5%.
Adding problems to the above remain the ongoing war between two major primary sector countries Russia and Ukraine and the economic damages from the Covid-19 Pandemic.
Winners and Losers
The Advanced Economies of the world are expected to have an even lower number of growth at 1.3%, while about the Emerging Markets there are estimations of a 3.9% year-to-year growth.
USA is one of the leaders of growth prospects in the advanced economies category with an estimation of 1.6% GDP growth, with Canada and Spain falling just behind with 1.5%. Great Britain is the most impacted economy as the estimations suggest -0.3% growth, which results in a recession of the country's economy.
On the other hand, India and China are as usual the winners in the emerging markets category with 5.9% and 5.2% growth projections, respectively. South Africa is one of the severely impacted as it is only expected to score a 0.1% GDP year-to-year growth.
The Future
Despite the 2023 economic slowdown there are surely some positive signs in the IMF's statement. The economy is projected to get back to higher positive growth rates in 2024 with a rate of 3%, with Advanced Economies reaching a low of 1.4% but with Emerging Markets striking an impressive 4.2% growth rate.
However, the future is just that, an unknown future, and countries, international organizations and large global companies should take care of the fragile economic environment that the world and its citizens are facing right now.