Global economy to grow by 2.9 pct in 2023 — MoF
07 Oct 2022
The global economy is projected to expand by 2.9 per cent in 2023, due to slower-than-expected growth in both advanced economies and emerging market and developing economies (EMDEs), said the Ministry of Finance (MoF).
In its Economic Outlook 2023 report released today, the MoF said advanced economies’ growth is expected to moderate further to 1.4 per cent.
It also forecast that the United States’ gross domestic product (GDP) is projected to register at one per cent due to weak private consumption with inflation expected to remain above the Federal Reserve’s target of two per cent.
“Likewise, growth in the euro area is expected to moderate to 1.2 per cent as limited energy supply will continue to adversely affect economic activities,” the report said.
The report outlined EMDEs’ growth forecast to be marginally higher by 3.9 per cent in 2023, buoyed by elevated private consumption and exports.
China’s economy is projected to grow by 4.6 per cent, the expansion is attributed to strong domestic demand amid fiscal stimulus.
Meanwhile, the ASEAN-5’s (Indonesia, Malaysia, the Philippines, Singapore, and Thailand) growth is forecast to increase by 5.1 per cent, sustained by further improvements in domestic consumption and private investment.
In 2022, global growth is expected to expand by 3.2 per cent, supported largely by Asia Pacific’s GDP growth despite rising energy prices, supply chain disruptions and challenging financial conditions.
The ministry said global trade is anticipated to record 3.2 per cent in 2023 amid weaker demand, while trade is expected to record a growth of 3.2 per cent in advanced economies and 3.3 per cent in EMDEs.
In advanced economies, both exports and imports are expected to grow by 4.7 per cent and 4.5 per cent, respectively, owing to prolonged supply chain disruptions.
“Likewise, both exports and imports of EMDEs are anticipated to grow to 3.6 per cent and 4.8 per cent, respectively,” MoF said.
It said world trade for this year is expected to grow moderately to 4.1 per cent in 2022, following the prolonged geopolitical conflict in Eastern Europe as well as stringent lockdown measures in China to contain the spread of COVID-19.
In 2022, advanced economies are expected to record growth of 5.0 per cent and 6.1 per cent in exports and imports, respectively.
Trade in EMDEs is expected to moderate with exports and imports projected to grow at a slower rate of 4.1 per cent and 3.9 per cent, respectively
Global inflation is forecast at 5.7 per cent in 2023, backed by an anticipated fall in prices of commodities, including crude oil, while the inflation rate in advanced economies is projected to record 3.3 per cent and EMDEs at 7.3 per cent.
“Global inflation is anticipated to register at 8.3 per cent this year, in line with higher food and energy prices.
“The inflation rate is projected at 6.6 per cent in advanced economies and 9.5 per cent in EMDEs,” MoF added.