Global Economy Shows Signs of Resilience Despite Lingering Threats
The world economy is showing signs of resilience this year despite lingering inflation and a sluggish recovery in China, the International Monetary Fund said on Tuesday, raising the odds that a global recession could be avoided barring unexpected crises.
The signs of optimism in the I.M.F.’s latest World Economic Outlook may also give global policymakers additional confidence that their efforts to contain inflation without causing serious economic damage are working. Global growth, however, remains meager by historical standards, and the fund’s economists warned that serious risks remained.
The I.M.F. raised its forecast for global growth this year to 3 percent, from 2.8 percent in its April projection. It predicted that global inflation would ease from 8.7 percent in 2022 to 6.8 percent this year and 5.2 percent in 2024, as the effects of higher interest rates filter throughout the world.
The outlook was rosier in large part because financial markets — which had been roiled by the collapse of several large banks in the United States and Europe — have largely stabilized. Another big financial risk was averted in June when Congress acted to lift the U.S. government’s borrowing cap, ensuring that the world’s largest economy would continue to pay its bills on time.
Source: The New York Times
