Korea Institute for International Economic Policy Lowers Next Year's Global Growth Forecast from 3.6% to 2.4%

KIEP Announces '2023 World Economic Outlook' Report

[Image source=Yonhap News]

[Asia Economy Sejong=Reporter Kwon Haeyoung] It is forecasted that the global economic growth rate will reach only 2.4% next year, indicating that the economy will enter a downturn phase.

The Korea Institute for International Economic Policy (KIEP) released its "2023 World Economic Outlook" report on the 10th, lowering its global economic growth forecast for next year from the previous 3.6% to 2.4%, a 1.2 percentage point decrease.

By country, the U.S. growth forecast for next year was sharply reduced from 2.2% to 0.6%. Europe's growth rate was projected at 0.0%, and the UK at -0.2%. China's growth forecast, which is highly significant to our economy, was lowered from 5.3% to 4.8% due to risk factors including a slowdown in the real estate market.

This year's global economic growth forecast was also revised downward by 0.4 percentage points from 3.5% to 3.1%.

KIEP identified rapid base interest rate hikes, private debt burdens, and geopolitical risks such as war as factors contributing to the economic downturn. KIEP stated, "The pace of reversing the accommodative monetary policies since COVID-19 is too fast and intense compared to the 2008 global financial crisis," adding, "Interest rate hikes will especially burden emerging and underdeveloped countries where private debt has rapidly expanded, acting as additional downward pressure on the global economy." It also noted that using inflation and national debt to ease fiscal policy to prevent a recession would be difficult.

Furthermore, KIEP forecasted that aggressive monetary tightening in the U.S. will continue through the first half of next year, maintaining the strength of the U.S. dollar.

This content was produced with the assistance of AI translation services.