According to the International Monetary Fund (IMF), the global economy will grow by less than 3% in 2023, with India and China accounting for half of global growth that year.
Global growth will remain around 3% over the next five years, the lowest medium-term growth forecast since 1990 and well below the previous two-decade average of 3.8%. Asia, as per the report.
“Some momentum comes from emerging economies–Asia especially is a bright spot. India and China are expected to account for half of the global growth in 2023,” IMF chief Kristalina Georgieva said on Thursday (local time).The economic slowdown has continued this year as several economists and agencies earlier forecast degrowth in various advanced economies.
“Despite surprisingly resilient labour markets and consumer spending in most advanced economies, and the uplift from China’s reopening, we expect the world economy to grow less than 3 per cent in 2023,” the IMF chief said.IMF will next week release its World Economic Outlook.She further said economic activity is slowing in the US and the Eurozone because of the current higher interest rates regime, thereby weighing on the demand.
“About 90 per cent of advanced economies are projected to see a decline in their growth rate this year,” she predicted.
“For low-income countries, higher borrowing costs come at a time of weakening demand for their exports. And we see their per-capita income growth staying below that of emerging economies. That is a severe blow, making it even harder for low-income nations to catch up.”
Against that backdrop, she stressed upon three priorities to brighten global growth prospects. They are to fight against inflation and safeguard financial stability; improve medium-term growth prospects, and reduce global disparities.