Attendees arrive at the event campus on the opening day of the annual meetings of the International Monetary Fund (IMF) and World Bank in Marrakesh, Morocco, on Monday, Oct. 9, 2023.
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The International Monetary Fund (IMF) released its latest World Economic Outlook on Tuesday, providing revised growth projections for the United States and the euro zone.
In the updated report, the IMF raised its growth forecast for the U.S. by 0.3 percentage points for this year, now projecting a growth rate of 2.1%. The forecast for next year’s growth was also increased by 0.5 percentage points, now standing at 1.5%.
On the other hand, the IMF revised down its growth forecast for the euro zone by 0.2 percentage points for 2023, now expecting growth of 0.7%. For 2024, the forecast was lowered by 0.3 percentage points to 1.2%.
The IMF attributed the upgrade in the U.S. forecast to stronger business investment, resilient consumption growth, and government fiscal policies. However, it anticipates a slowdown in the second half of 2023 and into 2024 due to various factors such as slower wage growth, reduced pandemic savings, tighter monetary policy, and higher unemployment.
In the euro zone, the IMF highlighted diverging trends among major economies. While the German economy is expected to contract due to slowing trade and higher interest rates, French external demand has performed well and industrial production has improved.
The IMF slightly raised its growth forecast for the United Kingdom to 0.5% for 2023, but lowered it by 0.4 percentage points to 0.6% for 2024, citing the lingering impact of high energy prices on the country’s terms of trade.
The IMF maintained its global growth forecast of 3% for the year, and adjusted its 2024 forecast by 0.1 percentage points to 2.9%.
While acknowledging the subsiding of certain headwinds to global growth, such as the normalization of supply chains and improved global financial conditions, the IMF emphasized ongoing challenges. These challenges include a slowdown in manufacturing, a sluggish recovery in some service sectors, and central banks worldwide tightening policies to combat inflation.
China, which has dealt with a property crisis alongside the pandemic, is also experiencing a fading growth momentum following strict lockdown measures, according to the IMF. The organization projects Chinese growth of 5% for this year and 4.2% for next year.
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