World Economic Outlook

World Economic Outlook upsc notes

This topic of “World Economic Outlook” is important from the perspective of the UPSC IAS Examination, which falls under General Studies Portion.


  • The latest update on the world economic outlook has been released.


Global Economy

  • The global economy has weathered recent challenges, including the collapse of banks in the United States and Switzerland.

IMF Projections

  • The IMF projects a global economic expansion of 3% in 2023, reflecting a 20 basis points upgrade.
  • Concerns and risks continue to persist despite the projected growth.
  • Chief economist Pierre-Olivier Gourinchas advises caution due to existing challenges.
  • Risks remain tilted downwards, posing potential threats to the economic outlook.

Two Largest Economies

United States

  • The United States economy has slowed down considerably and faces uncertainty amid global and domestic headwinds.
  • The pandemic-era surpluses have depleted due to cash transfers during COVID-19 and a cost-of-living crisis.


  • China’s economy has also experienced a considerable slowdown and faces uncertainty from global and domestic factors.
  • The post-reopening rebound has fizzled due to a contraction in the real estate sector, weakening consumption, and slumping overseas export demand.

Euro Area

  • The Euro area has been impacted by a Ukraine-war induced gas price spike and a decelerating momentum in key economies such as Germany and France.
  • Eurozone business output experienced its fastest rate fall in eight months, raising concerns about the possibility of a deeper downturn in the region.


  • Inflation rates have been above central banks’ targets, leading to demand-retarding monetary tightening measures.

Russia’s Termination of Black Sea Grain Deal

  • Russia’s termination of the Black Sea grain deal has the potential to lead to a 15% increase in grain prices, impacting low-income African economies.

Debt Vulnerabilities in Frontier Economies

  • There is a need for a global debt resolution initiative to address debt vulnerabilities in frontier economies.

Lopsided Growth Risks

  • Lopsided growth risks could have a significant impact on the global economic edifice, potentially causing imbalances and disruptions.


  • The World Economic Forum is the organization providing the world economic outlook and analysis.

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