April 12: The International Monetary Fund (IMF) slightly lowered its outlook for the global economy on Tuesday, while predicting that most countries will avoid a recession this year despite economic and geopolitical concerns.

According to the AFP, the IMF predicted the global economy will grow by 2.8 percent this year and three percent in 2024, a decline of 0.1 percentage point from its previous forecasts in January.

“The baseline forecast is for growth to fall from 3.4 percent in 2022 to 2.8 percent in 2023, before settling at 3.0 percent in 2024,” reads the IMF's World Economic Outlook (WEO) report.

Advanced economies are expected to see an especially pronounced growth slowdown, from 2.7 percent in 2022 to 1.3 percent in 2023.

"The global economy is recovering from the shocks of the last few years, and particularly of course the pandemic, but also the Russian invasion of Ukraine," IMF chief economist Pierre-Olivier Gourinchas said in a press briefing ahead of the release of the IMF's World Economic Outlook (WEO) report.

Supply-chain disruptions and rising geopolitical tensions have brought the risks and potential benefits and costs of geoeconomic fragmentation to the center of the policy debate, IMF wrote on its website.

The overall picture painted by the WEO is a gloomy one, with global growth forecast to slow in both the short and medium terms, says AFP.

Close to 90 percent of advanced economies will experience slowing growth this year, while Asia's emerging markets are expected to see a substantial rise in economic output -- with India and China predicted to account for half of all growth, IMF managing director Kristalina Georgieva said last week.

Low-income countries, meanwhile, are expected to suffer a double shock from higher borrowing costs due to high interest rates, and a decline in demand for their exports, Georgieva said. This could worsen poverty and hunger.

Global headline inflation in the baseline is set to fall from 8.7 percent in 2022 to 7.0 percent in 2023 on the back of lower commodity prices but underlying (core) inflation is likely to decline more slowly, added the report.

This figure remains significantly above the two-percent target set by the US Federal Reserve and other central banks around the world, suggesting monetary policymakers have a long way to go before inflation is brought back under control, according to AFP.

According to the forecast, public debt as a ratio to GDP soared across the world during COVID-19 and is expected to remain elevated.

The IMF's baseline forecasts assume that the financial instability sparked by the collapse of Silicon Valley Bank last month has been broadly contained by the "forceful actions" of regulators on both sides of the Atlantic, Gourinchas told reporters.

Furthermore, the IMF forecasts that global growth will fall to three percent in 2028, its lowest medium-term forecast since the 1990s.