The fog around the world economic outlook has thickened with recent increase in financial market volatility. A hard landing, especially for advanced economies, has become a much larger risk.
2028 global growth forecast of 3% lowest medium-term growth forecast published in all WEO reports since 1990.
Baseline forecast is for global headline inflation to decline from 8.7% in 2022 to 7% in 2023, and 4.9% in 2024. 76% of economies expected to experience lower headline inflation in 2023.
India’s real GDP growth forecast for FY24 cut by 20 bps to 5.9%, and for FY25 cut by 50 bps to 6.3%. India’s consumer price inflation seen at 4.9% in FY24 and 4.4% in FY25.
The US growth forecast for 2023 is revised up by 20 bps to 1.6%, and by 10 bps for 2024 to 1.1%.
China’s growth estimate is retained at 5.2% for 2023 and 4.5% for 2024.
Major forces that affected the world in 2022 seem likely to continue into 2023. Many economies are likely to experience slower growth in incomes in 2023, amid rising joblessness.
Over the medium term, the world economy is not currently expected to return to the rates of growth that prevailed before the pandemic.
By 2026, the output loss (cumulative growth gap) projected to widen to 2.7%, more than double the initial impact
The estimated probability of 2023 global growth falling below 2%—an outcome that has occurred on only 5 occasions since 1970 - is now about 25%.