The International Monetary Fund raised its growth projections for the global economy this year thanks to the better-than-expected performance of the US economy and stimulus packages in China, while warning of the effects of wars and rising inflation rates.

BBC News quoted the fund as saying that the global economy will grow this year by 3.1% of GDP, while it had expected last October the global economy to grow by only 2.9%.

The fund kept its global economic growth forecast for next year at 3.2% unchanged.

The fund pointed out that central banks tightening monetary policies to curb inflation alongside reduced government spending in some countries are reasons for the expected slowdown in global economic growth to its lowest rates in two decades, excluding the period of the novel coronavirus pandemic.

At the same time, the fund warns of the possibility of further deterioration in global economic conditions due to continued rising prices caused by the pandemic shock as well as rising interest rates to counter rising consumer prices.

Pierre Olivier Gourinchas, chief economist at the IMF, said: "The global economy continues to show resilience and we are now in the final stage of the smooth recovery with steadily declining inflation and rising growth... but the growth path is still slow and disruptions may appear in the future."

Among the risks, the fund said they include new increases in raw material prices due to geopolitical shocks and supply chain disruptions resulting from events such as Houthi attacks on ships heading to Israel via the Bab el-Mandeb Strait and the Red Sea or the widening scope of the conflict between Palestinians and Israelis.

The fund also points to the possibility of central banks keeping interest rates high for a longer period due to inflation as another potential risk.

The IMF's economic projections assume a decline in raw material prices including fuel during the current and next year, with continued interest rate cuts in major economies.

The fund pointed to the decline in the global inflation rate during the last quarter of last year due to the decrease in energy prices, which is expected to continue declining until the end of 2025, with the global inflation rate dropping from 6.8% to 4.4%.