Global recovery to remain slow in 2023 – IMF World Economic Outlook

Global growth in 2023 is expected to be three per cent, down from 3.5 per cent in 2022, and slow down further to 2.9 per cent in 2024, the International Monetary Fund said in its World Economic Outlook report on October 10.

But while the global economy’s recovery from the pandemic, Russia’s invasion of Ukraine and the cost-of-living crisis has been slow, the IMF said that “in retrospect, the resilience has been remarkable.”

“Despite the disruption in energy and food markets caused by the war, and the unprecedented tightening of global monetary conditions to combat decades-high inflation, the global economy has slowed, but not stalled,” the Fund said.

Headline inflation will also continues to decelerate, from 9.2 per cent in 2022, on a year-over-year basis, to 5.9 percent this year and 4.8 percent in 2024, the report said.

In Bulgaria’s case, the IMF forecast 1.7 per cent economic growth in 2023, down from 3.4 per cent last year, but jumping up to 3.2 per cent in 2024.

IMF’s figure is closer to Bulgaria’s 1.8 per cent growth target, set out in this year’s Budget Act, than the European Commission’s forecast of 1.5 per cent, which it made in its spring forecast in May.

Average annual inflation in Bulgaria this year was projected at 8.5 per cent, compared to 13 per cent in 2022, and set to fall to three per cent in 2024, the IMF said.

Meanwhile, unemployment in Bulgaria was set to rise from 4.2 per cent in 2022 to 4.6 per cent this year, before dropping to 4.4 per cent in 2024, according to the report.

However, the IMF said that the risks to its forecast were mainly on the downside – such as a possible further deepening of China’s real estate crisis, increased volatility in commodity prices “under renewed geopolitical tensions and disruptions linked to climate change”, or the erosion of fiscal buffers in many states.

Worse yet, the medium-term growth prospects were weak, especially for emerging market and developing economies. “The implications are profound: a much slower convergence toward the living standards of advanced economies, reduced fiscal space, increased debt vulnerabilities and exposure to shocks, and diminished opportunities to overcome the scarring from the pandemic and the war,” the IMF said.

(Photo: Bruno Sanchez-Andrade)

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