IMF Issues Growth Warning as it Lowers 2023 Forecast

A man carrying bags of vegetables walk through an underpass in Beijing on April 11, 2023. (AFP)
A man carrying bags of vegetables walk through an underpass in Beijing on April 11, 2023. (AFP)
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IMF Issues Growth Warning as it Lowers 2023 Forecast

A man carrying bags of vegetables walk through an underpass in Beijing on April 11, 2023. (AFP)
A man carrying bags of vegetables walk through an underpass in Beijing on April 11, 2023. (AFP)

The International Monetary Fund slightly lowered its outlook for the global economy on Tuesday, while predicting that most countries will avoid a recession this year despite economic worries and geopolitical tension.

Concerns over high inflation, rising geopolitical tension and financial stability all hang over the updated forecasts, with the impact of the war in Ukraine continuing to dampen growth and drive up consumer prices in many countries.

Persistent economic concerns could overshadow plans by the IMF and World Bank to promote an ambitious reform and fundraising agenda at this year's spring meetings.

In its World Economic Outlook (WEO) report, the IMF predicts the global economy will grow by 2.8 percent this year and three percent in 2024, a decline of 0.1 percentage point from its forecasts in January.

The IMF's forecasts for the United States were slightly rosier: the world's largest economy was expected to grow by 1.6 percent in 2023, marginally higher than the previous forecast.

"The global economy remains on track for a gradual recovery from the pandemic and Russia's war in Ukraine," IMF chief economist Pierre-Olivier Gourinchas told a press conference Tuesday, adding that "the massive and synchronized tightening of monetary policy by most central banks" had begun to bring inflation back towards its target.

"At the same time, serious financial stability related downside risks have emerged," he said, referring to the banking turmoil unleashed last month after the dramatic collapse of Californian high-tech lender Silicon Valley Bank.

Advanced economies drag down growth

The overall picture painted by the WEO is gloomy, with global growth forecast to slow in both the short and medium terms.

Close to 90 percent of advanced economies will experience slowing growth this year, while Asia's emerging markets are expected to see a substantial rise in economic output -- with India and China predicted to account for half of all growth, IMF managing director Kristalina Georgieva said last week.

Low-income countries, meanwhile, are expected to suffer a double shock from higher borrowing costs due to high interest rates, and a decline in demand for their exports, Georgieva said. This could worsen poverty and hunger.

The IMF expects global inflation to slow to seven percent this year, down from 8.7 percent last year, according to the WEO forecasts. It is then expected to fall to 4.9 percent in 2024.

Both 2023 and 2024 inflation forecasts were revised upwards, and remain significantly above the two percent target set by the US Federal Reserve and other central banks around the world, suggesting policymakers have a long way to go before inflation is brought back under control.

Germany on brink of recession

While the picture is one of slowing growth, almost all advanced economies are still expected to avoid a recession this year and next.

Alongside growth in the United States, the Euro area is also forecast to grow by 0.8 percent this year, and 1.4 percent next year -- led by Spain, which will see 1.5 percent growth in 2023 and two percent growth in 2024.

But the area's biggest economy, Germany, is now expected to contract by 0.1 percent this year, joining the United Kingdom, the only other G7 country expected to enter recession in 2023.

The picture is more positive among emerging market economies, with China forecast to grow by 5.2 percent this year. But its growth is predicted to slow to 4.5 percent in 2024, as the impact of its reopening from the Covid-19 pandemic fades.

India's economic forecast has been downgraded compared to January, but it is still predicted to grow by 5.9 percent this year and 6.3 percent in 2024, providing some much-needed stimulus to the global economy.

And Russia is now expected to grow by 0.7 percent this year, up 0.3 percentage point on January's forecast, despite its invasion of Ukraine.

Poor productivity saps outlook

Looking forward, the IMF forecasts that global growth will fall to three percent in 2028, its lowest medium-term forecast since the 1990s.

Slowing population growth and the end of the era of economic catch-up by several countries including China and South Korea are a large part of the expected slowdown, as are concerns about low productivity in many countries, according to Daniel Leigh, who heads the World Economic Studies division in the IMF's Research Department.

"A lot of the low hanging fruit was picked," he told reporters ahead of the publication of the World Economic Outlook.

"On top of that now, with the geopolitical tensions and fragmentation, this is going to also weigh on growth," he said.



Al-Jadaan: Saudi Investments in Alternative Routes Ensure Continuity of Energy Supplies and Trade

General view of the Kingdom Tower in downtown Riyadh, Saudi Arabia, October 12, 2026. Picture taken with a mobile phone. REUTERS
General view of the Kingdom Tower in downtown Riyadh, Saudi Arabia, October 12, 2026. Picture taken with a mobile phone. REUTERS
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Al-Jadaan: Saudi Investments in Alternative Routes Ensure Continuity of Energy Supplies and Trade

General view of the Kingdom Tower in downtown Riyadh, Saudi Arabia, October 12, 2026. Picture taken with a mobile phone. REUTERS
General view of the Kingdom Tower in downtown Riyadh, Saudi Arabia, October 12, 2026. Picture taken with a mobile phone. REUTERS

Saudi Finance Minister Mohammed Al-Jadaan said the Kingdom’s investments in alternative routes have helped ensure the continuity of energy supplies and trade flows amid uncertainty.

He stressed that strengthening economic resilience requires diversifying sources of economic strength, protecting the foundations of growth, and maintaining the capacity to deal with recurring and prolonged disruptions.

Speaking at the third meeting of G20 Finance Ministers and Central Bank Governors under the US presidency, held Thursday in Bangkok, Al-Jadaan said the global economy had demonstrated an ability to adapt to repeated disruptions. He explained that resilience is fundamental to this adaptability, but strengthening it requires an understanding of its cost, how it can be developed, and how it should be financed.

He said the success of economic policies in confronting shocks is not limited to mitigating the impact of current challenges. It also depends on preserving the ability to support future ambitions and sustain the long-term path of economic transformation, while maintaining sufficient buffers to deal with any new developments that may arise.

Al-Jadaan participates in one of the sessions at the annual meetings of the IMF and World Bank in Bangkok (IMF)

The Finance Minister stressed that fiscal policies must protect the foundations of growth, highlighting the importance of effective international cooperation in achieving economic stability.

He said access to reliable and affordable energy, along with the uninterrupted flow of essential goods, helps contain price pressures and ease the burden on national budgets, thereby strengthening countries’ ability to navigate uncertainty.

In this context, Al-Jadaan said the Kingdom, through its investments in alternative routes, has helped ensure the continuity of energy supplies and trade flows amid disruptions. This underscores the importance of infrastructure and transportation and supply routes in strengthening economies’ ability to withstand shocks and limiting their impact on markets and the flow of essential goods.

Managing Shocks and Strengthening Resilience

Discussing ways to enhance economic resilience, Al-Jadaan said dealing with prolonged shocks depends not only on the size of the buffers available to countries, but also on how these buffers are managed over time, while preserving sufficient capacity to respond to future developments.

He noted that strengthening economic resilience requires reducing exposure to risks through economic diversification, reinforcing energy and food security, and developing more resilient supply chains and infrastructure. These priorities have become increasingly important amid recurring disruptions affecting trade flows, the availability of essential goods, and the cost of obtaining them.

Al-Jadaan also addressed artificial intelligence, noting that it has evolved beyond a purely technological issue to become part of a broader agenda aimed at achieving sustainable growth and strengthening economic resilience. This reflects the expanding scope of policies required to build economies capable of adapting to change while preserving opportunities for long-term growth and transformation.

The Role of International Financial Institutions

The Finance Minister emphasized the important role played by multilateral financial institutions in helping economies that are most vulnerable to risk cope with financing pressures through financial and technical support programs and policy advice, thereby strengthening their ability to withstand shocks and maintain economic stability.

Al-Jadaan concluded his participation in the third meeting of G20 Finance Ministers and Central Bank Governors, held on the sidelines of the 2026 Annual Meetings of the International Monetary Fund and the World Bank Group in Thailand.

He met with a number of officials, heads of international financial institutions, and representatives of credit rating agencies. The meetings addressed developments in the global economy and policies aimed at supporting its stability, while also reviewing developments and reforms in the Saudi economy as part of the Kingdom’s efforts to strengthen its presence in international economic and financial dialogue.


Saudi Cybersecurity Market Tops $4.3 Billion in 2025

Employees working on computers (National Cybersecurity Authority). 
Employees working on computers (National Cybersecurity Authority). 
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Saudi Cybersecurity Market Tops $4.3 Billion in 2025

Employees working on computers (National Cybersecurity Authority). 
Employees working on computers (National Cybersecurity Authority). 

Saudi Arabia’s cybersecurity market reached SAR 16.3 billion ($4.3 billion) in 2025, recording a compound annual growth rate of 10.7% over the past three years, according to a new report by the National Cybersecurity Authority (NCA).

Government spending on cybersecurity products and services totaled SAR 5.1 billion, accounting for 31% of the market, while private sector expenditure reached SAR 11.2 billion, representing 69%.

The figures were released in the NCA’s report, Key Economic Indicators in Saudi Arabia’s Cybersecurity Sector 2026, which examines market size, the sector’s contribution to gross domestic product, workforce trends and other measures of growth.

Contribution to GDP

The cybersecurity sector contributed approximately SAR 20 billion to Saudi Arabia’s GDP at current prices in 2025, registering a compound annual growth rate of 13.2%, the authority reported.

Of that amount, SAR 9.7 billion represented the direct contribution of cybersecurity products and service providers, while indirect contributions totaled SAR 10.3 billion.

The sector accounted for 0.42% of the Kingdom’s overall GDP and 0.71% of non-oil GDP.

The cybersecurity workforce exceeded 22,000 specialists last year, reflecting a compound annual growth rate of 5.9%.

The report linked this expansion to specialized training initiatives and programs designed to meet the needs of vital sectors and support economic and social development.

Women accounted for 33% of cybersecurity professionals in Saudi Arabia, surpassing the global participation rate of approximately 22%.

Spending on products and services

Cybersecurity products accounted for 51% of total market spending, valued at SAR 8.3 billion, while services represented 49%, or SAR 7.9 billion.

The report identified key areas of spending, including endpoint security and management, cybersecurity systems integration, network security, data security and security operations solutions.

Public-private cooperation

The NCA highlighted efforts to strengthen competitiveness, encourage investment and innovation, and promote cooperation between the public and private sectors as key drivers of market growth.

The study classified cybersecurity offerings into 100 products and services, drawing on internationally recognized methodologies, standards and practices.

The NCA is Saudi Arabia’s designated cybersecurity authority and national reference body, tasked with protecting the Kingdom’s vital interests, national security, critical infrastructure, priority sectors, and government services and activities.

Its responsibilities also include stimulating industry growth, promoting innovation and investment, conducting research and development, and issuing periodic reports on cybersecurity at the national and sectoral levels.


Bank of England's Breeden: Cost-cutting by Firms Helping Central Bank

FILE PHOTO: Deputy Governor for Financial Stability, Sarah Breeden during the Bank of England financial stability report press conference, at the Bank of England, London. Picture date: Tuesday July 7, 2026. Doug Peters/Pool via REUTERS/File Photo
FILE PHOTO: Deputy Governor for Financial Stability, Sarah Breeden during the Bank of England financial stability report press conference, at the Bank of England, London. Picture date: Tuesday July 7, 2026. Doug Peters/Pool via REUTERS/File Photo
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Bank of England's Breeden: Cost-cutting by Firms Helping Central Bank

FILE PHOTO: Deputy Governor for Financial Stability, Sarah Breeden during the Bank of England financial stability report press conference, at the Bank of England, London. Picture date: Tuesday July 7, 2026. Doug Peters/Pool via REUTERS/File Photo
FILE PHOTO: Deputy Governor for Financial Stability, Sarah Breeden during the Bank of England financial stability report press conference, at the Bank of England, London. Picture date: Tuesday July 7, 2026. Doug Peters/Pool via REUTERS/File Photo

Bank of England Deputy Governor Sarah Breeden said on Thursday that cost-cutting by UK companies in response to the energy price shock caused by the Iran war would make it easier for the central bank to contain inflation.

"What's really different now, relative to when we had the last energy shock in 2022, is that people aren't looking to push costs through," Breeden said in an interview with ⁠CNBC television.

"There's a desire ⁠to absorb the shock rather than just pass it on, which makes our job as monetary policymakers a bit easier in these uncertain times,” Reuters quoted her as saying

The comments about cost-cutting by companies echoed those made by BoE Governor Andrew ⁠Bailey earlier this week.

Breeden has voted with the majority of the Monetary Policy Committee to keep borrowing costs on hold since the start of the Iran war but said in September that she might change her stance if the energy price shock feeds through into broader inflation.

Investors are pricing a quarter-point rate hike by the BoE next month as a ⁠near ⁠certainty.

Breeden, in Bangkok for the semi-annual International Monetary Fund meetings, also told CNBC she hoped wages would not rise sharply as they did in 2022 after Russia's full-scale invasion of Ukraine due to weakness in the labor market now.

Earlier on Thursday, BoE Chief Economist Huw Pill said a rate hike by the central bank should not be interpreted by investors as the start of a long series of increases.