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The IMF has projected global growth to fall from an estimated 3.5% in 2022 to 3.0% in 2023 and 2024. While the July update forecast for 2023 is modestly higher than predicted in the April 2023 World Economic Outlook (WEO), it remains weak by historical standards.

The rise in central bank policy rates to fight inflation continues to weigh on economic activity, the IMF said.

Earlier in the year, the US debt ceiling standoff was resolved and strong action by authorities contained turbulence in US and Swiss banking, reducing the immediate risks of financial sector turmoil. This, the IMF said, moderated adverse risks to the outlook. The fund, however, said the balance of risks to global growth remains tilted to the downside.

In the July 2023 WEO, IMF cuts US growth from 2.1% in 2022 to 1.8% in 2023. Euro Area growth is projected to slow from 3.5% in 2022 to 0.9% in 2023. Growth in Latin America & the Caribbean, Middle East & Central Asia, and Sub-Saharan Africa are projected to see marginal declines. Emerging & Developed Asia is the outlier, where growth is projected to increase from 4.5% in 2022 to 5.3% in 2023.