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World Bank lowers US GDP growth outlook to 0.5% in 2023

In 2022, the US economy, according to the organization’s estimates, increased by 1.9%

WASHINGTON, January 10. /TASS/. The World Bank expects US GDP to increase by 0.5% in 2023, while the growth rate is projected to reach 1.6% in 2024, according to the organization’s January report published on Tuesday.

The World Bank worsened its forecast for US GDP growth by 1.9 percentage points (pp) in 2023 and by 0.4 pp in 2024 compared to its June estimates. In 2022, the US economy, according to the organization’s estimates, increased by 1.9%.

"In the United States, rising food and energy prices, together with a tight labor market, pushed inflation to multi-decade highs in 2022, before price pressures began easing toward the end of the year. This has prompted the most rapid monetary policy tightening in more than 40 years. Activity contracted in the first half of 2022, and domestic demand remained weak in the second half, with particular softness in residential investment. In all, growth for 2022 is estimated to have slowed to 1.9% as substantial fiscal consolidation - worth about 5% of GDP - added to monetary policy headwinds," the report said.

According to the World Bank, "Growth is projected to slow to 0.5% in 2023 - 1.9 percentage points below previous forecasts - the weakest performance outside official recessions since 1970. Inflation is expected to moderate in 2023 as labor markets soften and wage pressures abate".

Anti-Russian sanctions

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