Citing factors such as the reopening of China, tight labor markets in countries including the U.S., and inflation easing, the International Monetary Fund upgraded its outlook for the global economy this week. Its previous outlook in October came with a stark warning about recession risk; yet, strong household spending, high employment and Europe’s ability to handle the energy crisis appears to have changed the trajectory. However, the IMF also warned that Russia’s ongoing invasion of Ukraine, COVID outbreaks in China and potential supply chain snarls could hamper progress.
- The IMF expects the global economy to grow 2.9% this year, a slight increase from its October projection of 2.7%. The IMF sees growth accelerating to 3.1.% in 2024. The economy grew 3.4% in 2022.
- The IMF also predicts a recession for the U.K., which it says would be the worst-performing G7 economy in 2023.