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IMF raises 2023 global growth forecast on China's reopening
The International Monetary Fund (IMF) on Monday estimated that China's economy will grow by 5.2 percent in 2023, 0.8 percentage points higher than its October 2022 forecast.
"Growth is expected to pick up in China with the full reopening in 2023," the IMF stated in the newly released update to its World Economic Outlook report.
The IMF said global growth would still fall to 2.9 percent in 2023 from 3.4 percent last year, but that marked an improvement over its earlier prediction of 2.7-percent growth in 2023.
The IMF said it had raised its growth expectations due to "surprisingly resilient" demand in the U.S. and Europe, an easing of energy costs, and the reopening of China's economy after the removal of its strict COVID-19 restrictions.
IMF Chief Economist Pierre-Olivier Gourinchas said recession risks had subsided and central banks had made progress in controlling inflation, but more work was needed to curb prices, while the further escalation of the Russia-Ukraine conflict could lead to new disruptions.
He acknowledged that China's reopening would put some upward pressure on commodity prices, but "on balance, I think we view the reopening of China as a benefit to the global economy," noting it would help ease production bottlenecks that have worsened inflation and increase Chinese consumer demand.
(With input from Reuters; Cover image via CFP)
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Check out this infographic showing how the world's second-largest economy played a key role in driving the global economic recovery over the past three years.
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