indicatorThe Owl

Global economy still slowing

IMF global economic outlook largely unchanged

By Rob Roach, ATB Economics 11 October 2023 1 min read

The International Monetary Fund (IMF) has updated its global economic forecast.

The latest outlook is for global economic growth to slow from 3.5% last year to 3.0% in 2023 and 2.9% next year, as higher interest rates weigh on advanced economies.

The projections remain below the historical (2000–2019) average of 3.8%.

Not much has changed with regard to the forecast since the previous update, but the forecast for global growth in 2024 is down slightly by 0.1 percentage points from the July 2023 estimate.*

The IMF’s projections are consistent with a soft landing scenario, where inflation declines without a major downturn—particularly in the United States.

Canadian GDP growth is expected to ease to 1.3% this year and 1.6% in 2024, while U.S. growth is pegged at 2.1% and 1.5%, respectively.

Global inflation is forecast to fall from 8.7% last year to 5.8% next year as higher interest rates work their way through the economy. The inflation forecast assumes international commodity prices stay relatively low.

Despite the decline in headline price growth, “core inflation is generally projected to decline more gradually, and inflation is not expected to return to target until 2025 in most cases.”

Overall, “the global economy continues to recover slowly from the blows of the pandemic, Russia’s invasion of Ukraine, and the cost-of-living crisis. In retrospect, the resilience has been remarkable.” With that said, “growth remains slow and uneven.”

*The IMF outlook was prepared before the outbreak of the Israel-Hamas war and IMF Chief Economist Pierre-Olivier Gourinchas was quoted as saying that it is "too early" to assess its impact in global economic growth.

Answer to the previous trivia question: Claudia Goldin has been awarded the 2023 Nobel Prize in Economics for her research advancing our understanding of women's work force participation.

Today’s trivia question: How many countries belong to the International Monetary Fund?

The global economy is forecast to grow by 2.9% in 2024

The global economy is forecast to grow by 2.9% in 2024

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