World Economic Outlook
This topic of “World Economic Outlook” is important from the perspective of the UPSC IAS Examination, which falls under General Studies Portion.
News
- The latest update on the world economic outlook has been released.
Highlights
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
- 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
- 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.
Who
- The World Economic Forum is the organization providing the world economic outlook and analysis.
