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2022 Annual Report

Creating Value.
For a Better Tomorrow.

2022 Annual Report


Forecast of Macroeconomic Development

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In its World Economic Outlook Update (WEO Update) of January 2023, the International Monetary Fund (IMF) expects the global economy to grow by 2.9% in 2023. Its forecast of lower growth than in 2022 reflects the rise in central bank rates to fight inflation, especially in advanced economies, as well as the war in Ukraine.

In Europe, according to the IMF, the effects of rate hikes by the European Central Bank and eroding real incomes are expected to drag on economic growth in 2023. For the eurozone, the IMF expects gross domestic product (GDP) to rise by 0.7% in 2023, with GDP for Germany expected to grow by 0.1%. For the UK, it expects GDP to fall by 0.6% due to tighter fiscal and monetary policies as well as subdued demand among households.

For the USA, the IMF predicts a slowdown in GDP growth to 1.4% in 2023, with interest rate hikes by the Federal Reserve a major contributor to this.

The IMF sees Japan’s economy benefiting in 2023 from the depreciation of the yen and continued monetary and fiscal policy support from the Japanese government, as well as higher business investment, and forecasts GDP growth of 1.8% for the country in 2023.

For India, the IMF forecasts a high GDP growth rate of 6.1% for 2023. In China, the cessation of COVID-19-related measures is expected to lead to a noticeable upturn in the economy, with the IMF currently estimating GDP growth of 5.2%.

In other emerging and developing economies, the IMF mostly expects a slowdown in economic development in 2023. In Brazil and Russia, for example, the IMF anticipates a rise in GDP of 1.2% and 0.3%, respectively.

The IMF’s forecast is based on the assumption that the high inflation rates will begin to fall in 2023. Further interest rate hikes by the world’s major banks as well as falling prices for raw materials, and for energy in particular, are expected to contribute to this as well.

The IMF also points toward a number of opportunities and risks. A stronger boost from pent-up demand in many economies or a rapid fall in inflation could have a positive impact. Significant risk factors from the IMF’s perspective include a delay to the economic recovery in China resulting from another outbreak of COVID-19, an escalation of the war in Ukraine and tighter global financing conditions, which would worsen the debt crisis in many countries. The financial markets could also suddenly reprice in response to adverse inflation news, while further geopolitical fragmentation could hamper economic progress.