International Monetary Fund forecasts global economy for the next two years and say that US economy will be facing significant deterioration in the upcoming months

The chief economist of the International Monetary Fund, Pierre-Olivier Gourinchas, warned of the weakness of US fiscal policy.

In the International Monetary Fund’s October 2023 World Economic Outlook report, Gourinchas expressed strong concerns about the state of the US economy.

He pointed out that the fiscal deficit in the United States deteriorated significantly in 2023, and stressed the importance of not repeating this deterioration in American financial policy.

The US budget deficit reached $1.52 trillion in the first months of 2023, based on US Treasury Department data, while the deficit in fiscal year 2022 was $1.38 trillion.

The US national debt exceeded $33 trillion for the first time in the country’s history last month, according to US Treasury Department data.

However, US Treasury Secretary Janet Yellen confirmed that the country is working to achieve a sustainable fiscal path despite the large national debt.

Yellen added that reducing the deficit is considered possible and that US President Joe Biden has proposed a series of measures to reduce the deficit over time, in addition to investing in the economy.

On the other hand, the International Monetary Fund announced its latest forecasts for the global economy for the period from 2023 to 2024, and revised growth forecasts for a number of economies.

As for the Saudi economy, the IMF expected that Saudi Arabia’s economy will witness growth of 0.8% during the year 2023, compared to previous expectations that indicated growth of 1.9% last July.

The IMF reduced his expectations for the performance of the Saudi economy this year by 1.1%, however, the IMF estimate for Saudi economic growth in 2024 to 4% compared to a previous forecast of 2.8%.

The IMF attributes the reduction of its expectations for the growth of the Saudi economy in 2023 to the decrease in oil production that came within the framework of the OPEC+ agreement, as the Kingdom of Saudi Arabia reduced its production by 1.5 million barrels per day.

As for China, the IMF forecasts that the Chinese economic growth for period of 2023 and 2024 were also lowered due to the slowdown in the real estate sector.

According to expectations, the Chinese economy will grow by 5% in 2023 and 4.2% in 2024.

As for the US economy, the IMF raised its growth forecast in 2023 to 2.1%, an increase of 0.3 percentage points compared to previous estimates.

He also raised expectations for next year 2024 to 1.5%, an increase of 0.5 percentage points.

The IMF made adjustments to the Eurozone growth forecasts for 2023 and 2024, reducing them by 0.2 percentage points and 0.3 percentage points, respectively.

As for Russia, the IMF raised the Russian economy’s performance forecast for 2023 by 0.7 percentage points and made it 2.2%.

But he lowered Russia’s GDP growth forecast for next year 2024 by 0.2 percentage points to 1.1%.

Finally, the IMF maintained the global economic growth forecast at 3% for the year 2023 and expected global growth at 2.9% in 2024.