IMF revises 2023 growth forecast upwards on China reopening, strength in U.S., Europe
The International Monetary Fund recently raised its 2023 global growth outlook slightly due to "surprisingly resilient" demand in the United States and Europe, an easing of energy costs, and the reopening of China's economy after Beijing abandoned its strict COVID-19 restrictions.
The IMF said global growth would still fall to 2.9% in 2023 from 3.4% in 2022, but its latest World Economic Outlook forecasts mark an improvement over an October prediction of 2.7% growth this year with warnings that the world could easily tip into recession.
For 2024, the IMF said global growth would accelerate slightly to 3.1%, but this is a tenth of a percentage point below the October forecast as the full impact of steeper central bank interest rate hikes slows demand.
"We have to sort of be prepared to expect the unexpected, but it could well represent a turning point, with growth bottoming out and then inflation declining," - Pierre-Olivier Gourinchas (IMF chief economist)
In its 2023 GDP forecasts, the IMF said it now expected U.S. GDP growth of 1.4%, up from 1.0% predicted in October and following 2.0% growth in 2022. It cited stronger-than-expected consumption and investment in the third quarter of 2022, a robust labor market, and strong consumer balance sheets.
The unknown factor in South Africa is what impact the increased electricity load-shedding will have.
There are up and downside risks in nearly all markets currently. Predictions in 2023 are anybody's guess frankly. At Nucleus, we remain cautiously optimistic and keep doing what we do. Optimize the supply chains of our customers to save them money, whilst simultaneously improving visibility and service.
Image Source: Visual Capitalist