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The International Monetary Fund increased its global growth projections for this year by two tenths, thanks to what it called “positive surprises” and a “greater than expected” resilience in different countries. The organism increased eight tenths the forecast of China; four for the United States and one tenth for Latin America and the Caribbean. According to the institution, global inflation will decrease considerably in 2023 and 2024.
The great lender of the countries is optimistic about the economic outlook in the next two years.
In the words of the IMF’s director of research, Pierre-Olivier Gourinchas, the new projections are due to the fact that “the current scenario is less gloomy than our October forecast”, and responds to recent sudden events such as the reopening of China after three years. of confinement.
“The global economy is expected to slow this year before rebounding next year. Growth will remain weak on record as the fight against inflation and Russia’s war in Ukraine weigh on activity. Despite these headwinds On the contrary, the prospects are less bleak than in our October forecasts and could represent a turning point, with growth bottoming out and inflation falling,” explained Gourinchas.
The agency raised several tenths of the forecasts it published in October and ruled out negative growth in global GDP, which often occurs when there is a global recession.
For the managers of the fund, there are four reasons for this increase in their projections: the first is due to the fact that economic growth was “surprisingly resilient” between July and September, thanks to a robust labor market, domestic consumption, business investment and a best response from European countries to the energy crisis caused by the war in Ukraine.
“Economic growth was surprisingly resilient in the third quarter of last year, with a strong job market, robust private demand and better-than-expected adaptation to the energy crisis in Europe,” Gourinchas explained.
Secondly, the decrease in the inflation rate in most countries and the third reason is the reopening of the second world economy, China, after the end of its ‘Zero covid’ policy.
The fourth and last reason was attributed to the fact that financial conditions began to improve since inflationary pressures began to decrease with the cuts in interest rate increases by the different central banks. Immediately afterwards, the dollar weakened and gave relief to emerging and developing countries.
With Reuters and AP
