The International Monetary Fund (IMF) warned Tuesday that global economic growth is projected to slow from 3.5 percent in 2022 to 3 percent in 2023 and 2.9 percent in 2024.
That’s a 0.1 percentage point downgrade for 2024 from the group’s July estimate as the global economic outlook worsens.
Following a year of interest rate hikes by central banks around the world, international economic agencies are projecting slower growth even as the U.S. economy has defied previous predictions of a recession.
“Part of the slowdown is the result of the tighter monetary policy necessary to bring inflation down. This is starting to bite,” Pierre-Olivier Gourinchas, economic counselor with the IMF, said in the IMF’s latest report.
Commodities and energy are particularly worrying to economists following renewed conflict in the Middle East. Economists voiced similar concerns after Russia invaded Ukraine in February 2022.
Another interest rate hike by the Federal Reserve could increase pressure on the slowing global economy amid rising conflict.
Developed economies in the Organization for Economic Cooperation and Development (OECD) as well as the United Nations Conference on Trade and Development (UNCTAD) issued similar forecasts.
The OECD projects 3 percent global growth in 2023 and 2.7 percent growth in 2024, noting as the IMF did that “the impact of tighter monetary policy is becoming increasingly visible.”
UNCTAD economists were less optimistic, estimating just 2.4 percent global growth in 2023, “meeting the definition of a global recession,” they said.
The economists did project the economy will move upward again in 2024.
The Hill’s Tobias Burns has more here.
