SEJONG – The global economy is expected to grow at a slower than expected clip of 2.4 percent next year, a state-run economic think tank said Thursday, citing the aftermath of aggressive monetary tightening in major economies and lingering geopolitical risks.
The growth outlook marks a drop from a 3.6 percent expansion projected in May, according to the Korea Institute for International Economic Policy (KIEP).
For the year, the global economy is expected to grow 3.1 percent, also slower than the earlier estimated 3.5 percent expansion, the institute said.
The 2023 growth outlook is higher than the 2.2 percent growth estimated by the Organization for Economic Co-operation and Development but lower than the 2.7 percent suggested by the International Monetary Fund.
The KIEP said the estimate was based on the assumption that the United States and other major economies maintain their monetary tightening policies through at least the first half of next year.
"The global economy is walking on thin ice, and any incidents can happen every day," KIEP President Kim Heung-chong told reporters.
"Over the past three years, (fiscal conditions of countries around the globe) have become fragile following three years of pandemic and the Russia-Ukraine war. And these factors are not unrelated to the South Korean economy," Kim added.
By country, the KIEP said the annual economic growth of the US is estimated at just 0.6 percent in 2023, as its private consumption is likely to contract on inflation and higher borrowing costs.
The eurozone economy is expected to remain flat in 2023, while that of Britain is anticipated to contract 0.2 percent in the aftermath of Russia's invasion of Ukraine.
Meanwhile, China is set to post an annual growth of 4.8 percent on the back of the eased coronavirus disease 2019 curbs, although its discord with the US is also set to remain a potential risk, the KIEP said. (Yonhap)
