The growth of China after the reopening of its economy due to the end of the “zero COVID” policy will largely boost the recovery of emerging countries in 2023, according to the new global outlook report of the International Monetary Fund (IMF), published this Tuesday.
According to the document, which maintains the same forecasts made last January, the Chinese Gross Domestic Product (GDP) will grow by 5.2% this year and will moderate to 4.5% in 2024.
The figures are much higher than the 3% that the world’s second largest economy grew in 2022. In addition, inflation will remain low this year, around 2%, and could rise to 2.2% in 2024.
“With China absorbing around a quarter of Asia’s exports and 5-10% of those from other regions, a reopening and growth of its economy is likely to generate positive spillovers.”, the document explains.
During a press conference to present the report, the division chief of the IMF Research Department, Daniel Leigh, qualified that these “spills”, however, they will not be as marked as might have been expected after such a robust recovery in the Asian giant.
According to Leigh, this is due to the fact that growth is mainly responding to a recovery in domestic services and not so much in investment, in addition to the fact that the growth forecast for China in the medium term is moderating as the country reaches the pace from other developed economies.
In fact, the improvement in living conditions and China’s economic progress will also contribute to slowing global growth in the medium term, as the country converges with other more developed regions.
In this sense, the IMF estimates that the global economy will grow by around 3% in the next five years, which is the lowest level since the 1990s.
The report also details that as new COVID-19 infections appear to have declined considerably in China, disruptions to supply chains will moderate.
However, the Fund’s research director, Pierre-Olivier Gourinchas, warned of weakness in the real estate sector, which could weigh on the rest of the Chinese economy.
India, the other great engine
The other big engine of the developing world will be India, which will grow 5.9% in 2023 and 6.3% in 2024, according to the IMF.
These figures are, however, slightly lower than those projected by the agency in its previous January report, in which it estimated growth of 6.1% for 2023 and 6.8% for 2024.
The Asian country is on its way to becoming the most populous in the world, ahead even of China, and last year its great economic recovery (Indian GDP grew 6.8% in 2022) made it the fifth largest economy on the planet. .
New Delhi, which this year holds the G20 presidency, has expressed its desire to become the voice of developing countries.
Source: EFE
Source: Gestion
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