The International Monetary Fund revises upwards its growth estimates for Italy, whose performance this year will be better than that of Germany, France and the Euro area average. The Italian GDP was in fact raised by 0.4 percentage points in 2023 to +1.1%, while that for 2024 was adjusted upwards by 0.1 points to +0.9%. The German economy, on the other hand, will contract by 0.3% this year. Thus, in the G7, Germany will probably be the only country to experience a recession in 2023, while the IMF now expects the US economy to contract by 0.3%. France instead seen in the two-year period at +0.8 and +1.3% respectively. Outside the Eurozone, the UK will drop from +4.1% in 2022 to 0.4% in 2023 (but the figure reflects an upward revision of 0.7 points), before recovering to 1.0% in 2024. Euroland growth is expected this year at +0.9%. But if Italy continues its recovery, the "locomotive" of growth in the Eurozone will be Spain with a +2.5% in 2023 and a +2% in 2024.
Signs of recovery
According to the IMF, in general, the global economy is showing signs of slight improvement. Global growth will reach 3% in 2023, up from 2.8% in the previous April estimate, and will remain at the same level in 2024, unchanged from the previous estimate. Our projections for this year are improving and inflation is coming down, which is good news, IMF chief economist Pierre-Olivier Gourinchas told AFP, but we are not out of the woods yet and growth remains subdued, particularly due to a marked slowdown in advanced economies. Most of the advanced economies, as well as the main emerging countries, seem to be performing better than feared by the Fund, despite a now restrictive monetary policy almost everywhere, to combat inflation that remains "stubbornly high". Also on this front, the IMF expects a slight improvement between now and the end of the year, with inflation expected to reach 6.8% worldwide by the end of the year, 0.2 percentage points less than forecast in April.
Price easing in China
But inflation is also lasting longer: at the end of 2024 it should still be at 5.2%, while in March the institute expected a drop of 0.3 percentage points. The slowdown we are seeing was largely due to price easing in China, particularly in industry in the second quarter, Gourinchas explained. The IMF insists on the need to continue monetary tightening to bring inflation back towards its target, even if this means having an effect on the economy, which has so far proved to be much more resilient than expected, especially in emerging countries.