The International Monetary Funds has forecasted that global growth will bottom out at 2.8 per cent this year.
This is before it rises modestly to around three per cent in 2024, representing a 0.1 per cent fall on its January projections.
In a report released by IMF Director of Research Pierre-Oliver Gourinchas, he said that global inflations is also heading down, signalling that the tightening of monetary policy through major interest rates rises is bearing fruit, though more slowly than initially anticipated from 8.7 per cent last year, to seven per cent for 2023 and a 4.9 per cent in 2024.
The IMF has also indicated that inflation will slow to 5.1 per cent this year, an upward revision of 0.6 percentage points from its target made this year – well above targets.
“The labour markets reflected in low unemployment rates remain very strong in most advanced economies – which may call for monetary policy to tighten further or to stay tighter for longer than anticipated,” Gourinchas said.
IMF adds that the more worrying effect is the sharp interest rate rises of the last year were having on the financial sector.