The Times - IMF Updated Forecast, Sentiment Looking Up25 Jul 2023 14:20
The International Monetary Fund has upgraded its forecasts for the world economy this year amid hopes that large economies like the United States are heading for a “soft landing” after suffering from more than a year of high inflation.
The Washington-based forecaster said global output would rise by 3 per cent this year, a 0.2 percentage point improvement from its last forecast made in April and a slowdown from the 3.5 per cent recorded in 2022.
The fund kept its outlook for the UK unchanged after announcing a 0.7 percentage point growth upgrade in May. The UK economy is expected to expand by 0.4 per cent this year, a substantial slowdown from the 4.1 per cent annual growth in 2022 but better than the projections of a long recession forecast at the start of 2023.
Significantly, the IMF upgraded its outlook for the US economy by 0.2 percentage points this year, to an annual growth rate of 1.8 per cent, the fastest rate in the G7 group of rich countries. The forecast said that the resolution of the country’s debt ceiling brinkmanship and moderate banking sector stress after March had helped to improve the growth outlook.
Inflation has fallen significantly this year in the US to a two-year low of 3 per cent, and has dropped from double-digits to 5.5 per cent in the eurozone. Both central banks in the US and Europe are expected to carry out one more interest rate rise this week, before considering an end to further monetary tightening for the rest of year.
“The signs of progress are undeniable,” Pierre-Olivier Gourinchas, the IMF’s director of research, said. “The global economy continues to gradually recover from the pandemic and Russia’s invasion of Ukraine.
https://www.thetimes.co.uk/article/44011bdc-2ae9-11ee-b33d-6d3f5a636b40?shareToken=3937ca82a45c29fad19944f2d19b546d
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