IIF: Global Economic Growth to Be as Weak in 2023 as 2009

The Institute of International Finance (IIF) said that the global economy will be as weak next year as it was in 2009 after the global financial crisis, as there are risks that the conflict in Ukraine will turn into a "forever war".

Global economic growth is expected to slow to 1.2% in 2023, the same level as 2009, economists including Robin Brooks and Jonathan Forton said in a report.

Analysts wrote that "the severity of the next blow to global GDP depends mainly on the course of the war in Ukraine ... The base scenario is that the fighting will continue until 2024, given that the conflict is existential for Putin."

According to IIF, Europe will lead the slowdown, as it has been most affected by the war. The Eurozone economy will shrink by 2% after the sharp drop in consumer and business confidence.

In the US, GDP is expected to rise by 1%, while Latin America will lead growth, with its economy expected to rise by 1.2%, as commodity exporters reap the benefits of higher food and energy prices.

The single biggest driver of the global economy next year will be China, as coronavirus restrictions ease, according to the Washington-based institute.