Future rising world updates9/4/2023 ![]() In 2023, disinflationary monetary policy is expected to bite, with global output growing by just 2.9 percent. Global inflation has been revised up due to food and energy prices as well as lingering supply-demand imbalances, and is anticipated to reach 6.6 percent in advanced economies and 9.5 percent in emerging market and developing economies this year-upward revisions of 0.9 and 0.8 percentage point, respectively. And in Europe, significant downgrades reflect spillovers from the war in Ukraine and tighter monetary policy. ![]() In China, further lockdowns and the deepening real estate crisis have led growth to be revised down by 1.1 percentage points, with major global spillovers. Lower growth earlier this year, reduced household purchasing power, and tighter monetary policy drove a downward revision of 1.4 percentage points in the United States. The baseline forecast is for growth to slow from 6.1 percent last year to 3.2 percent in 2022, 0.4 percentage point lower than in the April 2022 World Economic Outlook. Several shocks have hit a world economy already weakened by the pandemic: higher-than-expected inflation worldwide––especially in the United States and major European economies––triggering tighter financial conditions a worse-than-anticipated slowdown in China, reflecting COVID- 19 outbreaks and lockdowns and further negative spillovers from the war in Ukraine. Global output contracted in the second quarter of this year, owing to downturns in China and Russia, while US consumer spending undershot expectations. A tentative recovery in 2021 has been followed by increasingly gloomy developments in 2022 as risks began to materialize.
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