Macroeconomic conditions

The ongoing war in Ukraine, global inflation, the rising interest rates aimed at tackling this inflation, and the rapid spread of coronavirus in China all weighed on the global economy in 2022. Despite these negative factors, the International Monetary Fund (IMF) has determined that real GDP growth in 2022 was higher even than the figure assumed in its October forecast. This was mainly due to numerous economies, including the US and eurozone, experiencing a stronger third quarter. A general slowdown in economic activity was observed in the fourth quarter of 2022.

The IMF puts the global rate of inflation for 2022 at 8.8 percent, which is well above the levels recorded in recent decades. Further sharp increases in energy and food prices caused by the war in Ukraine and disruption to global supply chains were the main drivers of inflation for many countries and regions. The surge in demand associated with the economic recovery following the pandemic-induced global recession also created sustained upward pressure on prices.

Because of the adverse factors described above, the IMF estimates that global economic output increased by only 3.4 percent last year. This means the rate of growth halved compared with 2021 (6.2 percent), which had been boosted by pent-up demand in connection with the coronavirus pandemic.

The developed countries increased their economic output by just 2.7 percent in 2022 (2021: 5.4 percent). The decline in the eurozone from 5.3 percent to 3.5 percent was more moderate than in the US, which recorded growth of only 2.0 percent (2021: 5.9 percent).

The emerging markets and developing countries recorded growth of 3.9 percent, compared with 6.7 percent in the prior year. China saw its growth drop from 8.4 percent to 3.0 percent due to the rapid spread of coronavirus in the country and the strict lockdowns that were imposed to contain it.

The volume of global trade increased by just 5.4 percent, which meant that it too was unable to match the growth achieved in the prior year (10.4 percent).

Gross domestic product 2022 – real year-on-year change

Gross domestic product 2022 – real year-on-year change (bar chart)
Source: International Monetary Fund (as at January 31, 2023).