IMF downgrades UK, global growth forecasts for 2023

The International Monetary Fund cut its global growth forecast for next year on Tuesday, citing the conflict in Ukraine, food and energy inflation and higher interest rates, as it warned the worst was still to come.

In its latest World Economic Outlook, the IMF said it now expects global GDP growth of 2.7% in 2023, down from a forecast of 2.9% growth in July.

Chief economist Pierre-Olivier Gourinchas said "the three largest economies, the United States, China and the euro area will continue to stall".

"Overall, this year’s shocks will re-open economic wounds that were only partially healed post-pandemic," he said. "In short, the worst is yet to come, and for many people, 2023 will feel like a recession."

For 2022, the IMF kept its global growth forecast at 3.2%.

As far as the UK is concerned, the Fund now expects growth to slow in 2023 to 0.3% from 3.6% this year, down from a previous forecast of 0.5% growth. It said the fiscal package announced by chancellor Kwasi Kwarteng last month was expected to lift growth somewhat above the forecast in the near term, while complicating the fight against inflation".