In its new World Economic Outlook report released on January 30, the International Monetary Fund (IMF) raised its forecast for global GDP growth to 2.9% this year, 0.2 percentage points higher than that of the previous year. with the forecast published in October 2022. However, according to the IMF, this growth rate is still low compared to 3.4% in 2022.
The reasons, according to the IMF, are the surprising recovery in demand in the US and Europe, and falling energy costs with the reopening of the Chinese economy. Pierre-Olivier Gourinchas, chief economist at the IMF, said recession risks have eased and central banks are making progress in controlling inflation.
However, this expert warned that new disruptions could occur due to the Russia-Ukraine conflict and China’s fight against the COVID-19 epidemic.
Page Nikkei Asia The IMF’s latest forecast is less pessimistic than the previous report, with growth prospects improving in many regions. In addition, some risks, such as the impact of the Russia-Ukraine conflict and high inflation, are also less severe than before.
A supermarket in Tokyo, Japan. The IMF forecasts that the country’s economy will grow by 1.8% this year, up 0.2 percentage points from the previous forecast Photo: Reuters
Theo Reuters, the global economic outlook becomes more positive thanks to better-than-expected situation in some countries. For example, with the US, the IMF forecasts that the world’s leading economy will grow 1.4% (compared to 1% previously) in 2023.
According to Mr. Gourinchas, the US economy had an impressive third quarter of 2022 with strong labor market, household consumption and business investment while inflation pressure was no longer as great as before and good adaptability. than expected given the energy crisis in Europe.
In addition, China’s recent reopening of its economy is expected to contribute to global economic growth. The IMF has raised its growth forecast for this economy in 2023 to 5.2%, from 4.4% previously.
However, according to the page Nikkei Asia, an unpredictable risk is China’s efforts to control the COVID-19 epidemic when the country reopens. In addition, analysts warn that the world’s second-largest economy may still face persistent weakening of demand for Chinese exports.
India’s growth outlook remains strong as the IMF maintains its forecast for the country to grow at 6.1% this year. According to Mr. Gourinchas, India and China will contribute more than 50% of global growth in 2023.
In addition, a weaker dollar also improves the outlook for emerging economies burdened with foreign currency debt. The IMF also estimates about 84% of countries will face lower inflation this year than in 2022 but still forecasts average inflation rates of 6.6% in 2023 and 4.3% in 2024. However, the IMF warned that food and energy prices could escalate if the Russia-Ukraine conflict becomes more serious.
Notably, the UK is expected to be the only country in the group of 7 leading industrialized countries in the world (G7) to see its economy shrink this year. According to the IMF, UK GDP will shrink by 0.6% in 2023, compared with 0.3% growth in October 2022.
The UK has been hit hard by soaring gas prices after the Russia-Ukraine conflict took place because the country relies heavily on gas to generate electricity. In addition, the country also faces a labor shortage that is having a negative impact on the economy.
The ASEAN-5 group got hit
According to Pierre-Olivier Gourinchas, the IMF has lowered its growth forecast for Singapore and some other Southeast Asian economies in 2023 because the positive impact from China’s reopening of the economy is not enough to offset it. effects of the world economic slowdown.
For many Asian economies open to international trade, a slowdown in global activity will be a strong driver, Gourinchas said.
According to the latest IMF forecast, Singapore GDP in 2023 is 1.5%, compared with 2.3% released in October 2022. Meanwhile, for the group of 5 countries Singapore, Malaysia, Thailand, Indonesia, Philippines (referred to as ASEAN-5), the IMF also lowered its economic growth forecast this year from 4.5% to 4.3%. In 2024, according to the IMF, this group will grow by 4.7%, down 0.2 percentage points compared to the previous forecast.
Mr. Daniel Leigh, an expert at the IMF, commented with Reuters that geopolitical polarization still has a negative impact on countries’ growth prospects even as some economies benefit from supply chains shifting away from China.