The Ferrari Consulting and Research Group through its affiliated Supply Chain Matters blog provides perspectives on the latest published IMF World Economic Forecast.



As industry supply chain management teams enter the final quarter of 2023, there exists a surge in operational and business tactical support needs as businesses focus on achieving and meeting both Q4 and full year 2023 business performance goals.

For senior supply chain leaders and strategists, the coming weeks are the prelude to business planning support activities leading to operational and investment budgeting needs for the coming year.

As a supply chain research and consulting entity, October marks the start of our research activities leading up to our annual predictions for industry and global supply chains research advisory report that publishes at the start of the new year.

A key milestone in that effort is review and analysis of the International Monetary Fund’s (IMF) World Economic Forecast which updates in October to assist economists, governments and businesses in their planning for the coming year.


IMF Key Report Themes

While the report itself is in excess of 50 pages, many of the key themes and takeaways are included in the Executive Summary, Prelude, and a published IMF report summary blog.

The report’s Foreword section points to three global forces at play:

The first is an IMF observation that recovery of services sectors being almost complete with activities such as a return to tourism and other services prevalent. The notion presented is that high demand for labor-intensive services translates into tighter labor markets and hence low unemployment levels. With that stated, the agency references concerns for “the persistent manufacturing slowdown” as a suggestion that labor markets and activity will soften in 2024.

Second, tighter monetary policy necessary to bring down inflation levels down is “starting to bite.” Tighter credit conditions are thus impacting housing markets and rates of business bankruptcies, especially across Europe and the U.S.

Thirdly, “inflation and activity are shaped by the incidence of last year’s commodity price shock.” What IMF planners are referencing are the economies that were highly dependent on Russian energy inputs and consequent higher fossil fuel prices that have since resulted that are seen as a catalyst to higher inflation rates.

Observed Key Risks

The latest forecast indicates that while risks such as severe banking instability have moderated, “the balance is tilted to the downside.” They reportedly include the ongoing real estate driven financial crisis across China possibly deepening further which can spillover globally.

In the area of global wide inflation, observed is that while headline inflation has decreased, they remain uncomfortably high, and that bringing near-term inflation levels lower will be critical to overcoming the effects.

There is a concern for fiscal buffers eroding in countries with elevated debt levels, leaving many impacted countries caught in a mismatch among growing demand for services and fiscal risks.

A further risk, one that industry supply management teams need to pay very close attention to is commodity prices becoming more volatile under increased geopolitical tensions, along with disruptions linked to climate change events. The October report specifically indicates that oil prices have increased 25 percent since June due to supply restrictions imposed by OPEC and non-member countries. The report further points to geoeconomic fragmentation potentially leading to sharp commodity price dispersion across geographic regions that includes deemed critical minerals such as lithium, phosphate and others.

As we pen these risk highlights, there are growing worldwide concerns regarding the sudden, troubling and unexpected breakout of hostilities among the State of Israel and the Hamas  terrorist group controlling the Gaza Strip. Risks of wider Middle East tensions or conflicts can add to more volatile oil and commodity markets.

Other Highlights, Forecasts and Report Observations

Among the key highlights and report observations are that:

  • The global economy continues to recover from the multi-year pandemic but at the same time, “economic activity has slowed but not stalled” and that “The global economy is limping along, not sprinting.”
  • World economic growth will reportedly slow from 3.5 percent in 2022 to a forecasted 3 percent this year, an anticipated 2.9 percent in 2024.
  • Headline inflation, while continuing to decelerate is forecasted by the IMF to decline from 9.2 percent in 2022, to 5.9 percent in 2023 and a forecasted 4.8 percent for the coming year. The report adds that while underlying inflation levels have decreased: “they remain uncomfortably high.” That latter statement adds to the uneasiness of equity markets and lenders who eschew the prospect of continued higher interest rate moves among global banks. The agency in turn forecasts that most countries are not expected to reach their core controlled inflation targets until 2025.
  • In labor markets, despite signs of softening the report indicates that “labor markets in advanced economies remain buoyant with historically low unemployment rates helping to support activity.”
  • An accompanying table of World Economic Outlook Projections by geographic regions in 2024 includes detailed forecasts concerning expected Real GDP The grouping of Advanced Economies is forecasted to be 4.0 percent, with the U.S. real GDP expected to decline from 2.1 in 2023 to 1.5 percent in 2024. For the grouping Emerging Market and Developing Economies, GDP growth is expected to be flat at 4.0 percent, but the sub-category of Emerging and Developing Asia has GDP declining from 5.2 percent this year to 4.8 percent in 2024. Specifically for China, the decline in GDP is from 5.0 percent in 2023 to 4.2 percent in 2024.


Summary Thoughts and Added Resources

In this commentary we have specifically highlighted areas that industry and global supply chain planning and strategy teams should be homing in on in their planning assumptions and likely business implications for product demand, supply and risk mitigation actions for the coming year(s). Utilize our highlighted links to garner additional detail. In addition, follow along with our summary highlights of monthly global wide PMI reporting, in particular, our recently published highlights of September and Q3 PMI reports and trending, and our commentary highlighting two published reports indicating added evidence of emerging regionalization of global supply networks.

Over the next several weeks we will reference other available published data, commentaries and podcast conversations related to what to expect in 2024. Contact us for added information or consultation, or if you want to add your own thoughts regarding what to expect.

Stay tuned.


Bob Ferrari

© Copyright 2023, The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.