IMF upgrades outlook for the global economy in 2023

The outlook for the global economy is growing slightly brighter as China eases its zero-COVID policies and the world shows surprising resilience in the face of high inflation, elevated interest rates and Russia's ongoing war against Ukraine.

That's the view of the International Monetary Fund (IMF), which now expects the world economy to grow 2.9 percent this year. That forecast is better than the 2.7 percent expansion for 2023 that the IMF predicted in October, though down from the estimated 3.4 percent growth in 2022.

The IMF, a 190-country lending organization, foresees inflation easing this year, a result of aggressive interest rate hikes by the Federal Reserve and other major central banks. Those rate hikes are expected to slow the consumer demand that has driven prices higher. Globally, the IMF expects consumer inflation to fall from 8.8 percent last year to 6.6 percent in 2023 and 4.3 percent in 2024.

"Global conditions have improved as inflation pressures started to abate," the IMF chief economist, Pierre-Olivier Gourinchas, said at a news conference in Singapore. "The road back to a full recovery with sustainable growth, stable prices and progress for all has only started."

A big factor in the upgrade to global growth was China's decision late last year to lift anti-virus controls that had kept millions of people at home. The IMF said China's "recent reopening has paved the way for a faster-than-expected recovery."

The IMF now expects China's economy, the world's second-biggest, after the United States, to grow 5.2 percent this year, up from its October forecast of 4.4 percent. Beijing's economy eked out growth of just 3 percent in 2022, the first year in more than 40, the IMF noted, that China has expanded more slowly...