WASHINGTON (AP) — The International Monetary Fund is downgrading its outlook for the world economy for 2023, citing a long list of threats that include Russia’s war against Ukraine, chronic inflation pressures, punishing interest rates and the lingering consequences of the global pandemic.
The 190-country lending agency forecast Tuesday that the global economy would eke out growth of just 2.7% next year, down from the 2.9% it had estimated in July. The IMF left unchanged its forecast for international growth this year — a modest 3.2%, a sharp deceleration from last year’s 6% expansion.
“The worst is yet to come,” said IMF chief economist Pierre-Olivier Gourinchas. Three major economies — the United States, China and Europe — are stalling. Countries accounting for a third of global economic output will contract next year, suggesting that 2023 “will feel like a recession” to many people around the world, he said Tuesday.
In its latest estimates, the IMF slashed its outlook for growth in the United States to 1.6% this year, down from a July forecast of 2.3%. It expects meager 1% U.S. growth next year.
The fund foresees China’s economy growing just 3.2% this year, down drastically from 8.1% last year. Beijing has instituted draconian zero-COVID policy and has cracked down on excessive real estate lending, disrupting business activity. China’s growth is forecast to accelerate to 4.4% next year, still tepid by Chinese standards.