The IMF’s half-full-glass outlook is too rose-tinted

The IMF’s calendar-year forecast for global GDP growth in 2023 to slow only marginally amounts to an assessment that the global economy will enjoy a soft landing. Though some tail risks have lessened recently, we think the IMF’s forecasts look too sanguine.

What you will learn:

• Not only does the IMF expect China’s GDP growth to exceed the widely touted 5% growth target for this year, its forecasts for both the US and eurozone are at the top end of consensus expectations. Given data indicators point to a broad-based weakening around the turn of the year, we think our slightly below-consensus view is more defensible and that it’s far too soon to substantially upgrade our baseline economic forecasts for 2023, particularly as some of the Q4 GDP data aren’t as strong as they might initially seem.