The global economic outlook is less gloomy than a few months ago. While noting a slowdown in growth compared to 2022, the International Monetary Fund, in a sign of optimism, raises growth estimates for 2023 to +2.9%. A generalized upward adjustment that also includes Italy, with the Belpaese’s GDP expected to grow by 0.6% this year, i.e. 0.8 percentage points more than in October. Germany is also better than expected, with growth of 0.1% thanks to a revision of +0.4 points, and Russia, whose economy is holding up in the face of war. Great Britain, on the other hand, is worsening, turning out to be bringing up the rear of the G7 with a GDP down by 0.6%.
“The rise in interest rates by central banks and the war in Ukraine continue to weigh on economic activity,” says the IMF illustrating the update of the World Economic Outlook. “Despite this, the outlook is less gloomy than in October”, add the Washington experts, according to whom the straits of the banks
global markets begin to cool down demand and the race in prices but the “battle” against inflation “is far from won” Hence the invitation to central banks to continue with their “efforts” to combat the gallop in prices which, although slowing down, remain still higher than pre-pandemic levels. Global inflation is expected from 8.8% in 2022 to 6.6% in 2023 and 4.3% in 2024, with prices in advanced economies falling to 4.6% this year and 2.6% in 2024.
Speaking of an economy more resilient than expected, the Fund does not hide that however, the risks are oriented to the downside. These include a possible standoff in China but also an escalation of the war in Ukraine and stubbornly high inflation for an extended period. One of the greatest dangers – the IMF reiterates, which has been worried about it for months – is geopolitical fragmentation.
“The war in Ukraine and the sanctions on Russia are dividing the global economy into blocs and reinforcing geopolitical tensions, such as those associated with the US-China trade dispute”, highlights the Fund, explaining that the costs of fragmentation are particularly high in the short term. In addition to rejecting fragmentation, for the IMF it is necessary, looking ahead, to ensure financial stability: the risks – observe the experts – remain high as does volatility on the markets.
