Global inflation should ease in 2023 and 2024 as economic growth falls below historical averages, the International Monetary Fund said Monday in an update to its World Economic Outlook report. Global growth is projected to fall from an estimated 3.4% in 2022 to 2.9% in 2023, then rise to 3.1% in 2024. The forecast for 2023 is 0.2 percentage points higher than predicted in October 2022 but below the historical average of 3.8%.
The rise in central bank rates to fight inflation and Russia’s war in Ukraine continues to weigh on economic activity, IMF said. The rapid spread of COVID-19 in China dampened growth in 2022, but the recent reopening has paved the way for a faster-than-expected recovery. Global inflation is expected to fall from 8.8% in 2022 to 6.6% in 2023 and 4.3% in 2024, still above pre-pandemic levels of about 3.5%.
In the U.S., growth is projected to fall from 2% in 2022 to 1.4% in 2023 and 1% in 2024, the IMF said. With growth rebounding in the second half of 2024, growth that year will be faster than in 2023 on a fourth-quarter-over-fourth-quarter basis.