## Inflation Peaking amid Low Growth

_World Economic Outlook, January 2023_

## Source details

**Canonical URL:** [Inflation Peaking amid Low Growth](https://www.imf.org/en/publications/weo/issues/2023/01/31/world-economic-outlook-update-january-2023)

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- [Markdown version](/en/publications/weo/issues/2023/01/31/world-economic-outlook-update-january-2023/index.md)
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## Bibliographic details
- Published: January 31, 2023

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### Release details
- The World Economic Outlook Update will be released in Singapore at 9:30 am on January 31, 2023 (January 30 at 8:30 pm Washington D.C. time)

### Global outlook and key statistics
- Global growth is projected to fall from an estimated 3.4 percent in 2022 to 2.9 percent in 2023, then rise to 3.1 percent in 2024.
- The forecast for 2023 is 0.2 percentage point higher than predicted in the October 2022 World Economic Outlook (WEO).
- The 2023 forecast is below the historical (2000–19) average of 3.8 percent.
- Global inflation is expected to fall from 8.8 percent in 2022 to 6.6 percent in 2023 and 4.3 percent in 2024.
- Global inflation in 2024 is expected to remain above pre-pandemic (2017–19) levels of about 3.5 percent.

### Drivers of the outlook
- The rise in central bank rates to fight inflation and Russia’s war in Ukraine continue to weigh on economic activity.
- 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.

### Balance of risks and scenarios
- The balance of risks remains tilted to the downside, but adverse risks have moderated since the October 2022 WEO.
- Upside scenarios:
  - A stronger boost from pent-up demand in numerous economies.
  - A faster fall in inflation.
- Downside scenarios:
  - Severe health outcomes in China could hold back the recovery.
  - Russia’s war in Ukraine could escalate.
  - Tighter global financing costs could worsen debt distress.
  - Financial markets could suddenly reprice in response to adverse inflation news.
  - Further geopolitical fragmentation could hamper economic progress.

### Policy recommendations
- Priority in most economies: achieving sustained disinflation amid the cost-of-living crisis.
- With tighter monetary conditions and lower growth potentially affecting financial and debt stability:
  - Deploy macroprudential tools.
  - Strengthen debt restructuring frameworks.
- Accelerate COVID-19 vaccinations in China to safeguard the recovery and generate positive cross-border spillovers.
- Fiscal measures:
  - Target fiscal support at those most affected by elevated food and energy prices.
  - Withdraw broad-based fiscal relief measures.
- Strengthen multilateral cooperation to:
  - Preserve the gains from the rules-based multilateral system.
  - Mitigate climate change by limiting emissions and raising green investment.

*Source: World Economic Outlook Update — Inflation Peaking amid Low Growth (January 2023).*

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## Content in this bundle

- **WEO Update January 2023**
  - [WEO Update January 2023 (XLSX)](/-/media/files/publications/weo/2023/update/january/english/data/weojanuary2023update.xlsx){rel="external" type="application/vnd.openxmlformats-officedocument.spreadsheetml.sheet"}
- **Full Report**
  - [Full Report (Markdown version)](/-/media/files/publications/weo/2023/update/january/english/text.pdf.md){rel="alternate" type="text/markdown"}
  - [Full Report (PDF)](/-/media/files/publications/weo/2023/update/january/english/text.pdf){rel="external" type="application/pdf"}

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## References

- [Blog by Chief Economist Pierre-Olivier Gourinchas](https://origin-blogs.imf.org/en/blogs/articles/2023/01/30/global-economy-to-slow-further-amid-signs-of-resilience-and-china-re-opening)

_Source: https://www.imf.org/en/publications/weo/issues/2023/01/31/world-economic-outlook-update-january-2023_