The Strategist

World Bank improves global economy forecast 2023

06/07/2023 - 10:30

The World Bank increased its forecast for GDP growth in 2023 from the 1.7 percent anticipated in January to 2.1 percent.

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The World Bank (WB) has slightly increased its forecast for global economic growth in 2023, now anticipating a 2.1% growth in GDP rather than the 1.7% predicted in January. This is in line with the organization's most recent report on the state of the world economy.

According to the WB, growth in advanced economies would fall to just 0.7% in 2023 from 2.6% in 2022. In particular, the United States' GDP growth will decrease, reaching 1.1% in 2023 and 0.8% in 2024. The World Bank cited the impact of a steep increase in key rates over the previous 1.5 years as one of the causes. The research adds that because of tighter monetary policy and rising energy prices, growth in the euro area will only be 0.4% in 2023 following 3.5% in 2022.

The forecast is higher but still below 2022 for developing economies (apart from China): the World Bank anticipates 2.9% growth following 4.1% in 2022. The requirements for borrowing are becoming more stringent for developing nations; according to the World Bank, one in four of these nations have already lost access to global bond markets.