Global Economy to Slow Down in 2023, Says IFF Global Finance and Development Report

The International Finance Forum (IFF) released its Global Finance and Development Report 2023, projecting a slowdown in the global economy to 3.1% due to various factors such as monetary policy tightening, the war in Ukraine, and the lingering effects of the Covid-19 pandemic.

China’s GDP Growth Projection

According to the report, China’s GDP is expected to grow by 5.2% in 2023, with a slight slowdown to 5% in 2024. This growth is attributed to the country’s implementation of stimulus packages.

Weak Global Economy in 2024

The report also predicts that the global economy will remain weak in 2024, with global GDP expanding at a rate of 3.1%.

Decrease in Global Consumer Prices

Global consumer prices are projected to fall to 7% in the current year, a decrease from 9.2% in 2022. Inflation is expected to continue dropping to 5.8% in 2024.

Growth Projections for the US and EU

The US economy is estimated to expand by 2% in 2023, while the EU GDP is projected to grow by 0.8% in the same year, with a slight increase to 1.5% in 2023.

Challenges for the Global Economy

Looking ahead, the global economy faces several challenges, including high core inflation in many countries, geopolitical issues like the war in Ukraine affecting energy and food markets, and potential economic slowdown and inflation caused by geopolitical tensions. Uncertainty regarding China’s economic growth also poses a potential negative impact.

Recommendations for Financial Stability

The report recommends tightening monetary policy to combat inflation without compromising global financial stability. It also suggests consolidating fiscal positions while protecting vulnerable groups, accelerating structural reforms, and deepening international cooperation to promote multilateralism.

Analysis of Global Financial Market

In addition to economic projections, the report analyzes various aspects of the global finance market, including the US regional bank crisis, the US debt ceiling standoff, the impact of policy rates on currency performance, and China’s local government and corporate debts. The report concludes that vulnerabilities in China’s financial system are unlikely to escalate into systematic risks.

Focus on Green Finance and Digital Finance

The report also explores global and China’s green bond markets, carbon markets, and global green finance policies. It calls on the international community to collaborate in addressing the climate crisis. Furthermore, the report provides insights into global digital finance, specifically the application of technologies such as big data, blockchain, and artificial intelligence.

The IFF Global Finance and Development Report, published annually during the IFF Annual Meeting, offers comprehensive insights into China’s and the global economy as well as financial markets.

SOURCE: International Finance Forum (IFF)