{ "title": "World Economic Outlook Update", "publication": "IMF News, January 31, 2023", "sourceUrl": "https://www.imf.org/en/news/articles/2023/01/31/tr-13123-world-economic-outlook-update", "canonical": "https://www.imf.org/en/news/articles/2023/01/31/tr-13123-world-economic-outlook-update", "overlayPath": "/en/news/articles/2023/01/31/tr-13123-world-economic-outlook-update/index.md", "summary": "WEO World Economic Projections Outlook", "publishDate": "2023-01-31", "sections": [ { "heading": "Global outlook and projections", "content": "- Global growth: 3.4 percent in 2022; 2.9 percent in 2023; 3.1 percent in 2024.\n- Advanced economies: 2.7 percent in 2022; 1.2 percent in 2023. Nine out of ten advanced economies will see growth decelerate in 2023.\n- Emerging market and developing economies (group): growth rising to 4 percent in 2023 and 4.2 percent in 2024.\n- China: growth rebound to 5.2 percent in 2023 (0.8 percentage point above October forecast).\n- China and India together will account for half of global growth in 2023; the United States and the Euro-area combined will account for 10 percent only.\n- Euro-area: growth expected to bottom out at 0.7 percent in 2023.\n- United States: growth slowing to 1.4 percent in 2023 as federal interest rate hikes work through the economy." }, { "heading": "Inflation dynamics", "content": "- Global inflation expected to decline in 2023, but by 2024 headline and core inflation will still be above pre-pandemic levels in more than 80 percent of countries.\n- Core inflation: revised upwards to 6.9 percent in the fourth quarter of 2022; expected to decline to 4.4 percent by the end of 2023.\n- Energy and commodity prices contributed to prior inflation spikes but are projected to decline in 2023 in the Update’s baseline." }, { "heading": "Risks to the outlook (tilted to the downside)", "content": "- China risks: recovery could stall from greater-than-expected COVID disruptions or a sharper-than-expected slowdown in the property sector.\n- Inflation persistence: continued labor market tightness and growing wage pressures could require tighter monetary policy.\n- Geopolitical risk: escalation of the war in Ukraine could destabilize energy and food markets and further fragment the global economy.\n- Financial risk: sudden repricing in financial markets could tighten conditions, especially in emerging market and developing economies.\n- Upside scenarios: strong household balance sheets and solid wage growth could sustain private demand; easing supply-chain bottlenecks and cooling labor markets could allow for a softer landing." }, { "heading": "Monetary policy and financial stability guidance", "content": "- Where inflation pressures remain elevated, central banks need to raise real policy rates above a neutral stance and keep them there until underlying inflation shows a decisive declining path.\n- Easing monetary policy too early risks undoing gains on inflation.\n- Monitor and address vulnerabilities building in the housing sector and the less-regulated non-bank financial sector as central banks shrink balance sheets." }, { "heading": "Policy recommendations", "content": "- Advanced and emerging economies: adopt targeted fiscal measures that conserve fiscal space and allow high energy prices to reduce energy demand, avoiding broad and untargeted support that is costly and unsustainable.\n- Emerging market economies: let currencies adjust as much as possible to tighter global monetary conditions; use FX interventions or capital flow management where appropriate to smooth excessive and non-fundamental volatility.\n- Supply-side policies: remove key growth constraints, improve resilience, ease price pressures, and foster the green transition to alleviate accumulated output losses since the pandemic—especially in emerging and low-income economies.\n- Multilateral cooperation: buttress cooperation on international trade, expand the financial global safety net, public health preparedness, and the climate transition to mitigate geo-economic fragmentation." }, { "heading": "Regional and country notes (selected)", "content": "- Pakistan: 6 percent growth in 2022; growth of 2 percent projected in 2023 (downgraded by 1.5 percentage points for 2023). Recent central bank policy rate: 17 percent. Inflation in 2023 projected at about 21 percent; convergence to the five to 7 percent target range by mid-2025 envisioned under authorities’ measures.\n- Sri Lanka: India has indicated commitment to deliver financing and debt relief consistent with restoring debt sustainability; similar assurances from other official bilateral creditors are needed to unlock IMF financing.\n- Argentina: 4.6 percent growth in 2022 (upward revision of 0.5 percentage point); growth projected at 2 percent in 2023 (unchanged from October forecast). Inflation in 2022 close to 100 percent.\n- Mexico: 3.1 percent growth in 2022 (0.9 percentage point upward revision); 1.7 percent projected in 2023 (0.5 percentage point above prior forecast). Remittances represent about four percent of GDP.\n- United Kingdom: 4.1 percent growth in 2022 (0.5 percentage point upward revision); projected -0.6 percent in 2023 (downward revision of 0.9 percentage point). Inflation: 9.1 percent in 2022; expected 8.2 percent in 2023.\n- Singapore: 3.7 percent growth in 2022 (0.7 percentage point upward revision); 1.5 percent projected in 2023 (0.8 percentage point downward revision).\n- ASEAN-5: 5.2 percent in 2022; 4.3 percent in 2023; 4.7 percent in 2024. Region affected by fading post-COVID reopening momentum and regional monetary tightening; China reopening expected to support 2024 rebound.\n- Sub-Saharan Africa: growth projected around 3.8 percent in 2023; region remains below pre-pandemic typical growth and faces elevated food insecurity.\n- Debt distress: about 60 percent of low-income countries are either at risk of debt distress or already in debt distress; several smaller emerging market economies also affected. IMF engagement through financing and restructuring frameworks continues." }, { "heading": "Labor market and soft-landing assessment (U.S. focus)", "content": "- Baseline: narrow path to avoid recession or to experience a relatively shallow recession in the United States.\n- U.S. unemployment projected to rise from 3.5 percent to around 5.2 percent by 2024 in the Update’s baseline—an increase consistent with a significant slowdown but not a deep recession by historical standards.\n\nSource: World Economic Outlook Update, January 31, 2023, IMF Communications Department.\n\n---\n\n\n References\n\n- https://www.imf.org/en/About/senior-officials/Bios/pierre-olivier-gourinchas\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2023/01/31/tr-13123-world-economic-outlook-update" } ], "bullets": [ "[Markdown version](/en/news/articles/2023/01/31/tr-13123-world-economic-outlook-update/index.md)", "[Structured JSON version](/en/news/articles/2023/01/31/tr-13123-world-economic-outlook-update/index.json)", "[Bundle manifest](/en/news/articles/2023/01/31/tr-13123-world-economic-outlook-update/bundle-manifest.json)", "Published: January 31, 2023", "Global growth: 3.4 percent in 2022; 2.9 percent in 2023; 3.1 percent in 2024.", "Advanced economies: 2.7 percent in 2022; 1.2 percent in 2023. Nine out of ten advanced economies will see growth decelerate in 2023.", "Emerging market and developing economies (group): growth rising to 4 percent in 2023 and 4.2 percent in 2024.", "China: growth rebound to 5.2 percent in 2023 (0.8 percentage point above October forecast).", "China and India together will account for half of global growth in 2023; the United States and the Euro-area combined will account for 10 percent only.", "Euro-area: growth expected to bottom out at 0.7 percent in 2023.", "United States: growth slowing to 1.4 percent in 2023 as federal interest rate hikes work through the economy.", "Global inflation expected to decline in 2023, but by 2024 headline and core inflation will still be above pre-pandemic levels in more than 80 percent of countries.", "Core inflation: revised upwards to 6.9 percent in the fourth quarter of 2022; expected to decline to 4.4 percent by the end of 2023.", "Energy and commodity prices contributed to prior inflation spikes but are projected to decline in 2023 in the Update’s baseline.", "China risks: recovery could stall from greater-than-expected COVID disruptions or a sharper-than-expected slowdown in the property sector.", "Inflation persistence: continued labor market tightness and growing wage pressures could require tighter monetary policy.", "Geopolitical risk: escalation of the war in Ukraine could destabilize energy and food markets and further fragment the global economy.", "Financial risk: sudden repricing in financial markets could tighten conditions, especially in emerging market and developing economies.", "Upside scenarios: strong household balance sheets and solid wage growth could sustain private demand; easing supply-chain bottlenecks and cooling labor markets could allow for a softer landing.", "Where inflation pressures remain elevated, central banks need to raise real policy rates above a neutral stance and keep them there until underlying inflation shows a decisive declining path.", "Easing monetary policy too early risks undoing gains on inflation.", "Monitor and address vulnerabilities building in the housing sector and the less-regulated non-bank financial sector as central banks shrink balance sheets.", "Advanced and emerging economies: adopt targeted fiscal measures that conserve fiscal space and allow high energy prices to reduce energy demand, avoiding broad and untargeted support that is costly and unsustainable.", "Emerging market economies: let currencies adjust as much as possible to tighter global monetary conditions; use FX interventions or capital flow management where appropriate to smooth excessive and non-fundamental volatility.", "Supply-side policies: remove key growth constraints, improve resilience, ease price pressures, and foster the green transition to alleviate accumulated output losses since the pandemic—especially in emerging and low-income economies.", "Multilateral cooperation: buttress cooperation on international trade, expand the financial global safety net, public health preparedness, and the climate transition to mitigate geo-economic fragmentation.", "Pakistan: 6 percent growth in 2022; growth of 2 percent projected in 2023 (downgraded by 1.5 percentage points for 2023). Recent central bank policy rate: 17 percent. Inflation in 2023 projected at about 21 percent; convergence to the five to 7 percent target range by mid-2025 envisioned under authorities’ measures.", "Sri Lanka: India has indicated commitment to deliver financing and debt relief consistent with restoring debt sustainability; similar assurances from other official bilateral creditors are needed to unlock IMF financing.", "Argentina: 4.6 percent growth in 2022 (upward revision of 0.5 percentage point); growth projected at 2 percent in 2023 (unchanged from October forecast). Inflation in 2022 close to 100 percent.", "Mexico: 3.1 percent growth in 2022 (0.9 percentage point upward revision); 1.7 percent projected in 2023 (0.5 percentage point above prior forecast). Remittances represent about four percent of GDP.", "United Kingdom: 4.1 percent growth in 2022 (0.5 percentage point upward revision); projected -0.6 percent in 2023 (downward revision of 0.9 percentage point). Inflation: 9.1 percent in 2022; expected 8.2 percent in 2023.", "Singapore: 3.7 percent growth in 2022 (0.7 percentage point upward revision); 1.5 percent projected in 2023 (0.8 percentage point downward revision).", "ASEAN-5: 5.2 percent in 2022; 4.3 percent in 2023; 4.7 percent in 2024. Region affected by fading post-COVID reopening momentum and regional monetary tightening; China reopening expected to support 2024 rebound.", "Sub-Saharan Africa: growth projected around 3.8 percent in 2023; region remains below pre-pandemic typical growth and faces elevated food insecurity.", "Debt distress: about 60 percent of low-income countries are either at risk of debt distress or already in debt distress; several smaller emerging market economies also affected. IMF engagement through financing and restructuring frameworks continues.", "Baseline: narrow path to avoid recession or to experience a relatively shallow recession in the United States.", "U.S. unemployment projected to rise from 3.5 percent to around 5.2 percent by 2024 in the Update’s baseline—an increase consistent with a significant slowdown but not a deep recession by historical standards.", "[https://www.imf.org/en/About/senior-officials/Bios/pierre-olivier-gourinchas](https://www.imf.org/en/About/senior-officials/Bios/pierre-olivier-gourinchas)", "[PRESS CENTER](http://presscenter.imf.org/)", "[https://www.imf.org/en/home](https://www.imf.org/en/home)" ], "alternates": { "markdown": "/en/news/articles/2023/01/31/tr-13123-world-economic-outlook-update/index.md", "json": "/en/news/articles/2023/01/31/tr-13123-world-economic-outlook-update/index.json", "bundleManifest": "/en/news/articles/2023/01/31/tr-13123-world-economic-outlook-update/bundle-manifest.json" }, "generatedAtUtc": "2026-09-26T01:49:31.368Z" }