The World Bank (WB) has improved the global economic growth forecast for 2023 to 2.1% from 1.7% expected in January. However, the forecast for the rise in global GDP for 2024 has been reduced to 2.4% from 2.7%.
This is stated in the WB report Global Economic Prospects.
"After growing by 3.1% last year, the global economy will slow down substantially in 2023 – to 2.1% against the backdrop of further tightening of monetary policy to curb high inflation," the document reads.
The slowdown in economic growth due to stringent monetary policy is expected to peak in 2023 in many large economies.
The forecast for US GDP growth for 2023 has been raised to 1.1% from the 0.5% expected in January, for 2024 – reduced to 0.8% from 1.6%
The eurozone economy, according to the WB forecast, will increase by 0.4% this year and by 1.3% next year. Previously, it was expected that the eurozone GDP would remain unchanged in 2023 and increase by 1% in 2024.
The forecast for the rise of the Chinese economy this year has been improved to 5.6% from 4.3%, for next year – reduced to 4.6% from 5%.
The forecast for the growth of Ukraine's gross domestic product for 2023 has worsened to 2% from the 3.3% expected in January.
The bank explained the worsening of the forecast mainly by taking into account the economic shocks caused by the destruction of the energy infrastructure in the fourth quarter of 2022.
It is noted that public finances will remain under pressure despite official external support, including the recently agreed IMF funding of $15.6 billion under the Extended Fund Facility (EFF).
The WB reminded that the costs of reconstruction and recovery were estimated at 2.6 times higher than the level of GDP in 2022 and over 8 million refugees had been registered in Europe.
Following the IMF, the bank continues to refrain from forecasting the Ukrainian economy for the coming years, although it does so for other countries for both 2024 and 2025.