The economy is facing mixed prospects in the international environment: while buoyed by recovery plans in Europe and falling commodity prices, it also has sticky core inflation and an uncertain geopolitical climate to contend with. World growth is projected to slow in 2023 and rebound moderately in 2024. With the exception of the United Kingdom, advanced economies should avoid a recession, and emerging economies can expect strong economic growth, driven by a rebound in China.

The world economy is expected to grow by 2.8% in 2023, down markedly from 3.4% in 2022 due to the effects of high inflation and substantial key rate hikes by the major central banks, despite support from the reopening of China's economy. A slightly higher 3.0% is projected for 2024 as monetary policies ease.

Positive growth is forecast for advanced economies in 2023, with the exception of the United Kingdom, which is set to enter a recession brought on by 2022's strong inflation and persistent Brexit-related weaknesses in its economy. Over our forecast horizon (2023 and 2024), European economies should continue to be supported by the NextGenerationEU recovery plan, particularly Italy and Spain. In 2024, we expect the United States to benefit from a rebound in investment fuelled by a revival of industry policy.

In emerging economies, we anticipate strong economic growth overall, led by China and India, with slowdowns in Brazil and Turkey. China is set for a rebound in 2023, driven by a faster reopening of its economy than expected and a recovery in household spending. In Turkey, the aftermath of the 2023 earthquakes is likely to put a damper on growth.

World trade is expected to slow significantly in 2023 due to weaker economic activity before rebounding in 2024. Growth in world demand for French exports (see Chart on this page) should follow the same trend but lag behind global trade growth over the two-year period.

The main downside risks to this scenario include inflation developments, financial risks, the war in Ukraine and potential natural disasters.