How the Global Economy Is Recovering Post-Pandemic
The world economy is slowly coming out of the severe effects of the COVID-19 pandemic, but issues persist. By 2023 the economy is expected to have remained stable and strong because of the enhanced situation in the labour market and the consumers’ spending power. The IMF has recently revised its forecast for the global economy, expecting it to expand at 3% in both 2023 and 2024. This rebound is most prominent in emerging markets where growth is projected to climb to about 4.5% from a standstill in many developed nations including the eurozone and the UK which are still struggling with low growth attributable to inflation and political risks.
The reopening of the Chinese economy has also played a big part in the recovery, with the country expected to expand by 5.3% in 2023. Global inflation rates are gradually coming down due to supply chain constraints being gradually unwinded and energy prices being more stable. However, inflation is a problem and particularly core inflation which is expected to stay above the central bank’s target in the near and medium term.
However, there are still some risks that can be seen. There is still risk of financial loss because of the recent banking sector crises and more monetary measures could limit the growth rate. It is not simple to coordinate these tasks to support growth while addressing the problem of inflation. Finally, the global economy is on the path of recovery, and there are a few challenges that may arise in the future as the world is transitioning from the Covid-19 era.
