IMF: international recession prevented, however geopolitical danger weighs closely | EUROtoday

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The IMF's progress forecasts are enhancing, even when solely “marginally”. This was acknowledged by the final director Kristalina Georgieva within the presentation speech of the conferences of the Fund and the World Bank, which will probably be held subsequent week in Washington (information and statistics will arrive with the publication of the World Economic Outlook replace).

Recession prevented

In January, the IMF had forecast international GDP progress of three.1% in 2024 and three.2% in 2025. Georgieva, on April 11, says there will probably be a small enchancment, «due to sturdy exercise within the United States (2.1% and 1.7% GDP progress forecast in January for the present and subsequent 12 months respectively) and in lots of rising markets.” By contrast, the recovery of activity in the euro area is much more gradual, reflecting the persistent effects of high energy prices and weak productivity growth.

«We avoided a global recession, and a period of stagflation», underlines Georgieva. “The resilience of the world economic system – she explains – is favored by stable labor markets and an increasing workforce, partly as a result of immigration, which has confirmed significantly helpful in international locations with getting old populations.”

But the long-term prospects remain weak

However, global growth prospects in the medium term remain historically weak, “simply above 3%”, recalls the number one of the Fund. “The loss of global production since 2020 is approximately $3.3 trillion, and the costs fall disproportionately on the most vulnerable countries.”

Caution on rates

Inflation is also slowing faster than expected, according to the Fund. The trend will continue in 2024, “creating the circumstances for the principle central banks of superior economies to start chopping charges within the second half of the 12 months”. However, prudence is required: it’s forbidden to chop charges too quickly, to keep away from giving rise to a surge in costs, which might compromise the work executed up to now. Furthermore, the final mile within the battle in opposition to inflation is proving tough, as demonstrated by the information arriving from the United States.