Global growth is projected to slow sig￾nificantly in 2023 as continued monetary tightening constrains the credit supply.Inflationary pressures remain strong across much of the world, and headline inflation rates continue to exceed policy targets in most inflation-targeting econo￾mies. Stubbornly high inflation has resulted in higher borrowing costs, tighter credit conditions, and elevated financial stress, particularly in commercial real estate and other sectors that are highly sensitive to interest rates. Global economic activity is expected to weaken substantially in 2023, with the global growth rate projected to fall to just 2.1 percent before recovering modestly to 2.4 percent in 2024. Growth in emerging markets and developing economies (EMDEs) is also expected to slow significantly this year due to softening external demand, intensifying credit constraints, and weaker spillovers from China. The aggregate growth rate among EMDEs excluding China is projected to drop from 4.1 percent in 2022 to 2.9 percent in 2023. Meanwhile, the risk of debt distress is rising across EMDEs, especially low-income countries.