The world economy would cope better than initially feared with the shocks from the war in Ukraine and high inflation, the International Monetary Fund (IMF) said as it upgraded its forecast.

The global growth outlook for 2023 was revised up by 0.2 percentage points to 2.9 per cent, the IMF said in its World Economic Outlook update, released on Tuesday.

While this is weaker than the 3.4 per cent recorded in 2022, IMF Chief Economist Pierre-Olivier Gourinchas said.

Gourinchas said the growth of 2.9 per cent in 2023 would be less gloomy than had been assumed in the October forecast.

The IMF did not expect the global economy to slip into recession, an option economists had not ruled out late last year.

This is due to positive surprises and unexpectedly high levels of resilience in multiple economies, the IMF report said.

The IMF said that China’s shift away from its zero-COVID strategy was a potential driver for global growth.

However, the report also listed multiple risks that would cause the economic situation to deteriorate.

A worsening of the COVID-19 situation in China, an escalation of the Russian invasion of Ukraine and a debt crisis due to the tight monetary policy of central banks.

For the eurozone, the IMF forecasts growth of 0.7 per cent this year – 0.2 percentage points higher than previously assumed.

In Germany, gross domestic product (GDP) is expected to grow by just 0.1 per cent in 2023.

This is an increase of 0.4 percentage points from the previous estimate.

The German economy would in 2024 be expected to grow by 1.4 per cent – 0.1 percentage points less than previously assumed.

Global growth of 3.1 per cent is anticipated for 2024.