Prospects for the global economy are improving, as worst fears fade
Washington PostJan 31, 2023
The International Monetary Fund (IMF) released its latest World Economic Outlook report on Monday, revising its previous global growth projections upward by 0.2%.
According to the report, global output is forecast to slow to 2.9% in 2023, down from 3.4% last year, as central banks continue to raise interest rates to fight inflation, but a global recession would likely be avoided due to resilient customers and the reopening of China's economy.
This year will certainly be challenging, but it may well represent the turning point of the global economy. Though uncertainty still looms, confidence that a global recession can be avoided has improved as the world's three main economic engines – China, Europe, and the US – have outperformed expectations and averted some predicted problems so far.
Indeed, there's reason to be cheerful about the world economy as inflation has eased in the US, energy prices have plunged in Europe, and China has gotten rid of its destructive "zero-COVID" policy. It's too early, however, to dismiss the risk of a global recession as overheated labor markets and the energy crisis still endure.
There's a 66% chance that the US will enter a recession before 2024, according to the Metaculus prediction community.