Global consumer prices will fall to 7 per cent this year, down from 9.2 per cent in 2022 and inflation will drop further to 5.8 per cent in 2024, according to the IFF Global Finance and Development Report 2023.
Looking ahead, global economy still faces strong headwinds—core inflation in many countries still stay well above central banks’ targets as geopolitical issues including the war in Ukraine could further rock global energy and food markets; monetary policy tightening in an effort to rein in inflation could further dampen demand; geopolitical tensions could further trigger economic slowdown and runaway inflation; and the uncertainty of China’s economic growth momentum this year could have a negative impact on global growth.
The report recommends monetary policy tightening without sacrificing global financial stability, consolidating fiscal position while protecting vulnerable groups, accelerating structural reform, deepening international cooperation, and promoting multilateralism.
US’ economy is to expand 2 per cent in 2023 while the European Union’s GDP is projected to grow 0.8 per cent this year and 1.5 per cent in 2023.
China’s GDP is projected to grow 5.2 per cent in 2023 and slow to 5 per cent in 2024 as the country rolled out a series of stimulus packages.
Vulnerabilities in China’s financial system are unlikely to escalate into systematic risks, the report added.
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