On Monday, the International Monetary Fund lifted its output growth estimate for emerging economies for this year, citing China’s reopening, India’s resilience, and Russia’s surprise growth as reasons for the region’s economic downturn bottoming out in 2022.
The IMF’s latest World Economic Outlook forecasts 4.0% growth in emerging market and developing economies in 2023, 0.3 percentage points higher than its October projection and 0.1 percentage point higher than 2022’s 3.9% estimate. In 2024, a 4.2% expansion is expected.
Despite anticipated declines in inflation rate this year and next, it is still projected to be high. Compared to the average of 4.9% for 2017–2019, the fund anticipated that emerging economies will see price rises of 9.9% in 2022, 8.1% in 2023, and 5.5% in 2024.
The IMF reports that although EM is expected to grow faster in the next years, roughly half of the individual economies have lower growth predictions for 2023 than they did for 2022.
With “surprisingly resilient” demand in the United States and Europe, falling energy prices, and the reopening of China’s economy after Beijing abandoned its stringent COVID-19 controls, the global growth prognosis for 2023 has been revised upwards.
According to the IMF, among the downside risks to the estimates include a slowing of the Chinese economic recovery and a further escalation of the war in Ukraine, both of which might worsen inflation.