According to the International Monetary Fund’s October 2023 World Economic Outlook (WEO) report, the global economy is still recovering from the ramifications of the COVID pandemic and the war in Ukraine, demonstrating however remarkable resilience in the process. In details, and notwithstanding the chaos in the food and energy markets coupled with the global monetary tightening policies aiming at curbing inflation, growth has slowed down yet has not stalled. However, the report pointed out that this growth was uneven between countries, with divergences on the rise. In this regard, the report unveiled that the global economy grew by 3.5% in 2022, compared to a contraction of 2.8% in 2020 and a growth of 6.3% in 2021. Delving further into details, the IMF reported economic growth of 2.1% in the United States, 3.3% in the Euro area, 4.1% in the United Kingdom, and 1.0% in Japan during the year 2022, with an economic growth in emerging markets and developing economies of 4.1%. The IMF projects world economic growth to slow to 3.0% in 2023 and 2.9% in 2024, in comparison with previous estimates of 3.0% for 2023 and 3.0% for 2024. The report attributed the deceleration of growth in 2023 and 2024 to the gradual taming of global inflation. As for growth divergences, the report notes that emerging markets demonstrated a higher resilience than advanced economies, with the U.S. going against the trend amongst advanced economies due to robust consumption, while China’s growth estimates were slashed down due to a looming real estate crisis. In this vein, the report projected economic growth in 2023 to stand at 2.1% in the United States, 0.7% in the Euro area, 2.0% in Japan, 0.5% in the UK and 4.0% in emerging markets and developing economies. In parallel, the report pointed out that global inflation has been on a downward trajectory, with headline inflation dropping from 9.2% in 2022 to 5.9% in 2023 and an expected 4.8% in 2024, and core inflation (which excludes food and energy prices) being no exception, dropping at a slower pace from 6.4% in 2022 to 6.3% in 2023 and 5.3% in 2024. Always in the same vein, the report pointed out that countries dependent on energy imports from Russia suffered from higher inflationary pressures.

On the regional front, the WEO report estimated economic growth to have reached 5.6% in 2022 for the Middle East & Central Asia (MECA) region, projecting a growth of 2.0% in 2023 and 3.4% in 2024. Growth forecasts for the MECA region were revised from 2.6% for the year 2023 and 3.1% for the year 2024 in the IMF’s July 2023 WEO update.

Locally, the IMF estimated that Lebanon’s economic growth flat lined in 2022, following contractions of 25.9% in 2020 and 10.0% in 2021. The IMF did not provide growth estimates for Lebanon beyond the year 2022 citing the high degree of uncertainty surrounding the outlook of the Lebanese economy. The IMF also pointed out that Lebanon’s inflation accelerated to 171.2% in 2022 up from 84.9% and 154.8% in the years 2020 and 2021 on a respective basis. It also estimated the country’s current account deficit to GDP ratio to have deteriorated to 28.8% in 2022 in comparison with 15.7% in the year 2020 and 17.3% in the year 2021.