The global economy will cope with the consequences of the war in Ukraine and the continued high inflation somewhat better than initially feared. This is not least due to the developments in China, according to the updated forecast of the International Monetary Fund (IMF) on the global economy on Tuesday.
In its updated forecast, the IMF only expects global growth of 2.9 percent this year. That’s 0.2 percentage points more than assumed in October – but compared to the past two decades, growth is below the “historical average”.
But China’s move away from the zero-Covid strategy could pave the way for a recovery in the global economy, the report said. Overall, there are “positive surprises” and an “unexpectedly high level of resilience” in numerous economies.
The IMF does not expect the global economy to slide into recession this year – an option that the economists did not rule out in the autumn. According to IMF chief economist Pierre-Olivier Gourinchas, the current forecast could mark a “tipping point” and growth will bottom out while inflation eases.