The International Monetary Fund (IMF) on Tuesday slightly improved the outlook for the Portuguese economy this year to 6.2%, but cut forecasts for next year to 0.7%, appearing more pessimistic than the government. As for global growth, the IMF estimates that it will be 3.2% this year, and only 2.7% in 2023.
In world economic forecasts released on Tuesday, the IMF predicts that gross domestic product (GDP) will grow by 6.2% this year, higher than the 5.8% estimate known in June and close to the 6.5% forecast. %. introduced by the Government of Portugal in the state budget for 2023 (OE2023).
In a paper submitted to parliament on Monday, the Portuguese chief executive says he expects growth to slow to 1.3% next year, but the IMF is more pessimistic and sees the Portuguese economy grow at 0.7%, below the forecast by 1.9%. % in June.
The IMF also estimates annual growth at 2.3% in the fourth quarter of 2022 and 1.8% in the fourth quarter of 2023.
The Bretton Woods Institution projects Portugal’s inflation rate this year at 7.9% and 4.7%, which compares with the 7.4% and 4% forecast by the Portuguese executive.
The IMF also forecasts Portugal’s current account balance at -1.1% of GDP this year and -0.4% of GDP in 2023.
He is still projected to have an unemployment rate of 6.1% this year and 6.5% next.
For this year, the Council of Public Finances (CFP) and the Bank of Portugal (BdP) forecast GDP growth in Portugal at 6.7%, while the European Commission at 6.5%, and the Organization for Cooperation and Development estimates growth at 5.4% .
For next year, CFP predicts 1.2%, European Commission 1.9%, OECD 1.7% and BdP 2.6%.
Global growth this year will be 3.2%, but by 2023 it will decrease to 2.7%.
The IMF kept its forecast for global GDP growth at 3.2% this year, but cut 2023 growth by 0.2 percentage points to 2.7%, with a 25% chance of falling below 2%.
In updating its economic forecasts, the IMF estimates that more than a third of the world economy will contract this or next year, while the three largest economies – the US, the European Union and China – will continue to stagnate.
“The worst is yet to come, and for many, 2023 will look like a recession,” the institution’s chief economist, Pierre-Olivier Gurinchas, warns in the report.
The IMF warns that the world is going through an unstable period, whether in economic, geopolitical and environmental terms, that will affect the global outlook, especially highlighting the consequences of the war in Ukraine.
However, it keeps the global growth outlook for this year unchanged from estimates released in July, but is revising its forecasts for next year downward, still significantly higher than forecast in April.
“Forecasts are weaker than expected for 143 countries for 2023. The outlook for 2023 is the weakest since the 2.5% growth rate seen during the global recession in 2001, except for those seen during the financial crises and Covid-19,” he said. He speaks.
The IMF improved by 0.5 p.p. forecast for this year for the eurozone, up 3.1% compared to July, but reduced by 0.7 percentage points. by 2023 – by 0.5%.
The slowdown in growth will also be felt in the US, where the Bretton Woods organization revised its forecast downward by 0.7 percentage points. forecast for this, up 1.6%, estimating next year’s expansion of 1%.
For China, GDP growth is expected to be 3.2% this year and 4.4% in 2023, down 0.1 p.p. below. and by 0.2 p.p. correspondingly less than before.
Despite the scenario, the IMF notes that “a decline in global GDP or global GDP per capita – which often occurs during a recession – is currently not included in the baseline forecast.”
However, it acknowledges that a technical recession (at least two consecutive quarters of contraction in real GDP) at some point during 2022–2023 in about 43% of countries with quarterly forecast data (31 out of 72 countries) representing more than one third world GDP.
The IMF notes that downside risks to the outlook remain high given that “the risk of monetary, fiscal or financial policy miscalibration has risen sharply at a time when the global economy remains historically fragile and financial markets are showing signs of stress.”
