IMF: Prolonged high inflation dims outlook for world economy

File - People drive towards the city of Frankfurt, Germany, Friday, Feb. 3, 2023. The IMF delivered modest upgrades to the economies of the United States and Europe, which have proven more resilient than expected in the face of higher interest rates and shock of Russia's invasion of Ukraine. The European Central Bank appears at center, rear.

“Inflation is much stickier than anticipated even a few months ago,’’ Gourinchas wrote in the IMF's latest World Economic Outlook.and to keep them at or near a peak longer to combat surging prices. Those ever-higher borrowing costs are expected to weaken economic growth and potentially destabilize banks that had come to rely on historically low rates.

The fund foresees a 25% likelihood that global growth will fall below 2% for 2023. That has happened only five times since 1970, most recently when COVID-19 derailed global commerce in 2020. The fund now expects the United States, the world’s biggest economy, to grow 1.6% this year, down from 2.1% in 2022 but up from the 1.4% expansion that the IMF had predicted in January. A robust U.S. job market has supported steady consumer spending despite higher borrowing rates for homes, cars and other major purchases.

China, the world’s second-biggest economy, is expected to grow 5.2% this year, unchanged from the IMF's January forecast. China is rebounding from the end of a draconian zero-COVID policy that had kept people home and had hobbled economic activity.

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IMF: Prolonged high inflation dims outlook for world economyThe outlook for the world economy this year has dimmed in the face of chronically high inflation, rising interest rates and uncertainties resulting from the collapse of two big American banks. That’s the view of the International Monetary Fund, which has downgraded its outlook for global economic growth. The IMF now envisions growth this year of 2.8%, down from 3.4% in 2022 and from the 2.9% estimate for 2023 it made in its previous forecast in January. The fund said the possibility of a “hard landing,” in which rising interest rates weaken growth so much as to cause a recession, has ”risen sharply,” especially in the world’s wealthiest countries. All on Biden! There is not agreement across the board on this POV: I wonder if as high a % of inflation other countries face as also because of soaring profit margins like in the US. We our weak(being kind) leadership in Congress that is a problem not easily solved.
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Prolonged high inflation dims outlook for world economyThe outlook for the world economy this year has dimmed in the face of chronically high inflation, rising interest rates and uncertainties resulting from the collapse of two big American banks.
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Prolonged high inflation dims outlook for world economyThe outlook for the world economy this year has dimmed in the face of chronically high inflation, rising interest rates and uncertainties resulting from the collapse of two big American banks.
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