Pierre-Olivier Gourinchas, a researcher at the International Monetary Fund (IMF), has stated that this year’s economic slowdown is primarily affecting advanced economies, especially the euro area and the United Kingdom.
Growth is expected to fall to 0.8% and -0.3% in these regions respectively, before rebounding to 1.4% and 1% respectively.
Conversely, many emerging market and developing economies are experiencing growth, with year-end to year-end growth expected to accelerate from 2.8% in 2022 to 4.5% in 2023.
The IMF predicts that global inflation will fall from 8.7% last year to 7% this year and 4.9% in 2024, although inflation remains stickier than initially anticipated.
Core inflation, which excludes energy and food, has not yet peaked in many countries and is expected to slow to 5.1% by the end of this year.
Despite the resilience of labor markets, which remain strong in most advanced economies, the outlook for the world economy remains uncertain, and the IMF warns that monetary policy may need to tighten further or stay tighter for longer than currently anticipated.