IMF Sees Global Growth Below 3% in 2023

International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, US. REUTERS/Yuri Gripas
International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, US. REUTERS/Yuri Gripas
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IMF Sees Global Growth Below 3% in 2023

International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, US. REUTERS/Yuri Gripas
International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, US. REUTERS/Yuri Gripas

The International Monetary Fund expects global economic growth to dip below 3% in 2023 and to remain around 3% for the next five years, IMF Managing Director Kristalina Georgieva said in prepared remarks on Thursday.

That is the global lender's lowest medium-term growth forecast since 1990, and well below the average growth of 3.8% seen in the past two decades, Reuters reported.

Georgieva said strong and coordinated monetary and fiscal policy actions to respond to the COVID-19 pandemic and Russia's invasion of Ukraine had prevented a much worse outcome in recent years, but growth prospects remained weak in both the near- and medium-term given persistently high inflation.

"Despite surprisingly resilient labor 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 percent in 2023," she said in prepared remarks ahead of next week's spring meetings of the IMF and World Bank.

"With rising geopolitical tensions and still-high inflation, a robust recovery remains elusive. This harms the prospects of everyone, especially for the most vulnerable people and countries," she said at an event hosted by Meridian House and Politico.

Growth dropped by almost half to 3.4% in 2022 following the shock of Russia's war in Ukraine from the 6.1% rebound seen in 2021.

She said India and China would account for half of global growth in 2023, but about 90% of advanced economies would see a decline in their growth rate this year.

Low-income countries, saddled by higher borrowing costs and weakening demand for their exports, would see per-capita income growth staying below that of emerging economies, she said.

The IMF chief called on central banks to stay the course in the fight against inflation as long as financial pressures remained limited, but to address financial stability risks when they emerge through appropriate provision of liquidity.



Oil Falls as Traders Weigh Potential US-China Trade Talks

Oil Falls as Traders Weigh Potential US-China Trade Talks
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Oil Falls as Traders Weigh Potential US-China Trade Talks

Oil Falls as Traders Weigh Potential US-China Trade Talks

Oil prices fell on Friday as traders squared positions ahead of an OPEC+ meeting and amid some scepticism about a potential de-escalation of the trade dispute between China and the United States.

Brent crude futures were down 23 cents, or 0.4%, to $61.90 a barrel at 1105 GMT, while US West Texas Intermediate crude futures fell 24 cents, or 0.4%, to $59 a barrel.

For the week, Brent was on track for a 7% drop and WTI was down 6.5% so far, the biggest weekly declines in a month, Reuters reported.

China's Commerce Ministry said on Friday that Beijing was "evaluating" a proposal from Washington to hold talks aimed at addressing US President Donald Trump's sweeping tariffs, signalling a possible easing of the trade tensions that have rattled global markets.

"There is some optimism when it comes to US-China relations but the signs are only very tentative," said Harry Tchilinguirian, group head of research at Onyx Capital Group. "It's still very fluid, a one step forward, two steps back situation when it comes to tariffs."

Concerns that the broader trade war could push the global economy into a recession and crimp oil demand, just as the OPEC+ group is preparing to raise output, have weighed heavily on oil prices in recent weeks.

Complicating any talks was a threat from Trump to impose secondary sanctions on buyers of Iranian oil. China is the world's largest importer of Iran's crude.

Trump's comments followed a postponement of US talks with Iran over its nuclear program. He had previously restored a "maximum pressure" campaign against Iran, which included efforts to drive the country's oil exports to zero to help prevent Tehran from developing a nuclear weapon.

Oil prices gained late in Thursday's session to settle nearly 2% higher on Trump's remarks, erasing some of the losses recorded earlier in the week on expectations of more OPEC+ supply coming to the market.

Several OPEC+ members are set to suggest the group accelerates output hikes in June for a second consecutive month, Reuters previously reported. Eight OPEC+ countries will meet on May 5 to decide a June output plan.