Global Economical Outlook

Inflation, monetary tightening, and persistent pandemic and war worries have all contributed to a slowdown in global growth in 2022, which is a cause for concern for the global economy.

Below are some key details surrounding the economical world:

1. The global economy has been impacted by the epidemic and the global financial crisis, with growth hampered to 1.7%, the third slowest rate in over three decades.
2. Emerging markets and developing economies are struggling due to the weakness of major economies like the US, the eurozone, and China, which may lead to investment and corporate defaults due to slow development, tightening financial circumstances, and heavy debt.
3. Synchronized policy tightening was implemented to control excessive inflation, worsening financial conditions, and the Russian Federation’s invasion of Ukraine, reducing global growth by 1.3 percentage points.
4. National policymakers must target budgetary support to vulnerable populations, anchor inflation expectations, and protect financial institutions due to limited policy headroom.
5. Policies must also boost EMDE investment to offset the long-term growth slowdown caused by the epidemic, the invasion of Ukraine, and the rapid tightening of global monetary policy.
6. The global outlook has deteriorated markedly throughout 2022 amid high inflation, aggressive monetary tightening, and uncertainties from both the war in Ukraine and the lingering pandemic.
7. The global cost-of-living crisis, particularly for the most vulnerable groups, is being triggered by soaring food and energy prices that are eroding real incomes.
8. The global economy is projected to grow between 2.5 and 2.8 percent in 2022, a substantial downward revision from previous forecasts.
9. Rising government borrowing costs and large capital outflows are exacerbating fiscal and balance of payments pressures in many developing countries, with growth weakening in the world’s three largest economies (the US, China, and the EU) and significant spillovers to other countries.
10. Most forward-looking indicators suggest a further slowdown in global growth, though the baseline forecast for 2023 is highly uncertain.
11. Need for national policymakers to target budgetary support to vulnerable populations, anchor inflation expectations, and protect financial institutions due to limited policy headroom
12. Need for policies to boost EMDE investment to offset the long-term growth slowdown caused by the epidemic, the invasion of Ukraine, and the rapid tightening of global monetary policy
13. Need for new international investment and repurposing obsolete farm and petroleum subsidies.

The global economy has been facing challenges in recent years, with slow growth, inflationary pressures, and geopolitical tensions. The COVID-19 pandemic has further exacerbated these issues, causing a global recession and financial strain on emerging markets and developing economies. The outlook for the future remains uncertain, with many countries grappling with the effects of the pandemic, rising inflation, and tightening financial conditions. We have prepared an in-depth report, Global Economic Prospect 2023, revolving around what the future of economic growth would look like.