Strong labour markets and a resilient services sector drove gradual improvements to global economic projections for the year. However, a sharp slowdown persists due to high inflation, rising interest rates and unstable financial conditions.
Global real GDP is expected to grow 2.6% in 2023—an increase from the 2.5% forecast in Q2 and the 2.3% forecast in Q1. Inflation continues to decelerate from 2022 but remains elevated. The latest data puts inflation at 7.0% this year—up slightly from the 6.9% projected last quarter.
2.6%
2023 global real GDP growth
7.0%
2023 inflation forecast
Source: Euromonitor International Macro Model
Robust labour markets and the booming services sector point towards an optimistic trajectory but growth remains fragile. Prolonged cost pressures and weakening demand hinder global economic activity—manufacturing and traded goods, in particular—with real GDP estimates sitting significantly below the long-term trend.
Developing countries fuel global momentum while advanced markets continue to struggle. Among major economies, the US and Eurozone grapple with persistent inflation and rising interest rates, and China faces deflation and looser monetary policy.
The global outlook is highly uncertain. Geopolitical tensions could result in a resurgence of inflation and higher interest rates for longer.
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GDP Growth Forecasts and Revisions
Selected Advanced Economies: Real GDP Annual Growth Forecasts and Revisions from Last Quarter
Source: Euromonitor International Macro Model
Note: Data from 2023 onwards are forecasts, updated July 2023. Annual growth rates in percentages. Revisions in percentage points.
Selected Emerging Economies: Real GDP Annual Growth Forecasts and Revisions from Last Quarter
Source: Euromonitor International Macro Model
Note: Data from 2023 onwards are forecasts, updated July 2023. Annual growth rates in percentages. Revisions in percentage points.
Not to be distributed without permission. The data included in this report is accurate according to Euromonitor International at the time of publication in July 2023.