Dr Andrew Sentance, Senior Adviser - Cambridge Econometrics & Former MPC Member
The latest World Economic Outlook from the IMF – published over the summer – forecasts global GDP growth of 3% this year and next, after 3.5% growth in 2022. These figures are not particularly strong.
The average rate of world growth since 1980 – as measured by the IMF – has been around 3.5%. But the economic outlook globally has improved since last autumn when there was widespread talk of major western economies moving into recession.
Indeed, last November the Bank of England suggested that the UK economy faced the longest recession since the 1930s. This projection now looks way wide of the mark and the Bank is no longer forecasting a UK recession this year. After sluggish growth in 2023, it is expecting growth to pick up slightly in 2024.
There are a number of reasons why we have seen this modest improvement in the global economic outlook, admittedly from a low base. First, ener...