This year should be the nadir for the global growth cycle with a bounce-back in 2024, according to the International Monetary Fund (IMF), which said it will no longer issue regular global growth downgrades.
Speaking at the World Economic Forum in Davos, Switzerland, IMF managing director Kristalina Georgieva said: "I don’t see a downgrade now, but growth in 2023 will slow down."
The IMF has downgraded its growth forecast three times since October 2021. Despite this, Georgieva expects growth to bottom out this year and for 2024 to be a year in which the world economy finally sees an upside.
As reported by CNBC, Georgieva said: “Central banks have to be careful not to pull their foot from the brake too early”, as inflation is slowing down but remains “still quite high”.
On the topic of China, Georgieva repeated the IMF’s projections that the country will see GDP increase, but that it won’t make up as large a portion of global growth as it has in the past.
"The China growth rates are not going to return to the days when China delivered about 40% of global growth, this is not going to happen," Georgieva said.
She added that if China stays the course with its current Covid-19 reopening agenda, the country will reach the IMF’s growth projections of 4.4% by the end of the year, which is "in a better place above-average growth".