On October 10th, the International Monetary Fund (IMF) released its quarterly World Economic Outlook report. The report lowered the expected real growth rate of the world economy in 2024 to 2.9%, which is 0.1 percentage points lower than its forecast in July. At the same time, its forecast for China's economic growth has also been lowered by 0.3 percentage points. Faced with the deepening shadow of low growth such as the global trade downturn, the IMF expects the growth rate of the world economy to be only around 3% in five years.
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In fact, against the backdrop of the current complex and turbulent international situation and slow global economic recovery, the IMF's expected real growth rate for the world economy in 2023 remains at 3.0%, and will be lowered to 2.9% in 2024. It can be seen that less than 3% is expected to occur only five times in the period from 2000 to 2022, all of which are accompanied by serious economic crises such as the Lehman crisis or the first two years of the COVID-19 epidemic.
The difference from before is that there has been no significant global economic crisis, but rather a slowdown in the situation where high inflation has not completely subsided.
Among them, in developed countries, the IMF has lowered the economic growth rate of the eurozone by 0.3 percentage points to 1.2%. The influencing factors are the long-term conflict between Russia-Ukraine conflict and the soaring energy prices. It is predicted that the consumer price inflation rate will remain at a high level of 3.3% in 2024. On the Japanese side, considering the consumption of inbound tourists (foreign visitors), the IMF has increased its growth rate by 0.6 percentage points to 2.0% in 2023, while the growth rate in 2024 remains at 1.0%, the same as the previous forecast.
It is worth noting that the US economy, which is deeply concerned about economic recession, has raised its forecast for 2023 by 0.3 percentage points, and is expected to achieve high growth of 2.1%. The economic growth rate in 2024 has also increased by 0.5 percentage points, expected to reach 1.5%. The reason given is that due to the strong personal consumption, the practical significance of an "economic soft landing" in the United States has increased.
However, skepticism about the US economy remains strong among economists. For example, Robert Kahn of the Eurasian Group in the United States believes that the view that economic recession will not come is too optimistic.
In fact, due to rapid interest rate hikes in the United States, coupled with the rapid rise in long-term interest rates, which are currently set against the backdrop of fiscal turmoil, mortgage rates have also reached a new high in 23 years. It is difficult to predict how American households, who have run out of excess savings such as cash, will curb consumption. Meanwhile, due to the acceleration of export and investment restrictions on China, the US economic trend of restructuring the supply chain from a security perspective may further worsen its own situation. According to the proportion of imports from various countries to the United States, China fell from first place to Canada for the first time in 15 years from January to August 2023.
Signals of sluggish global economic demand and economic deterioration have emerged. The World Manufacturing Purchasing Managers' Index (PMI) released by S · P globally has been below the boom and bust line of 50 for 13 consecutive months as of September this year.
The conflict between Israel and the Islamic organization Hamas has also become a new concern. If the battle becomes increasingly fierce and leads to unstable supply, the declining energy prices will rise again, or it may affect the direction of the world economy.
The Chinese economic community believes that the average annual growth rate of the world economy from 2005 to 2014 was 3.9%. Now we can't find the same driving force as China, which has sustained double-digit growth in the past, and the world economy may be in a long-term downturn, which is particularly serious for emerging market countries and developing countries that have lost their financial surplus due to the COVID-19 epidemic.
The market generally indicates that the background of this slowdown is also the rapid tightening of finance by central banks of various countries in response to inflation, which has suppressed economic activity. Due to a degree of managed slowdown, the world economy may accelerate again in the short term in the future. Whether the global economy at the crossroads can choose to make progress depends on whether the global economy can completely overcome the COVID-19 epidemic and high inflation and restore a strong pace of growth.