In a recent report published by Reuters, the International Monetary Fund (IMF) has forecasted higher economic growth for the future.
Thus, showing good signs for both the United States and China the two largest economies. The IMF's chief economist Pierre-Olivier Gourin shared the following statement with reporters in Johannesburg "The global economy continues to display remarkable resilience, with inflation declining steadily and growth holding up. The chance of a 'soft landing' has increased."
However, Gourin also gave a warning that there could still be some challenges ahead. One of the biggest challenges Gourin referred to was the ongoing conflict within the Red Sea that has been interrupting supply routes causing many ships to extend their journeys.
Gourin also warned that the conflict could disrupt commodity prices and supply chains. Despite this warning, the IMF has cited that their positive outlook is supported by strong public, and private spending as well as increased labor force participation. This has resulted in mended supply chains, and cheaper energy and commodity prices.
Looking at the numbers the IMF predicts global growth of 3.1% this year which is up by two-tenths of a percentage from its October estimations and forecasted unchanged growth of 3.2% in 2025. However, global trade was expected to grow to 3.3% this year and then 3.6% in 2025 both of which are below the historical average of 4.9%. Most likely due to gains being weighed down by a slew of fresh trade restrictions. To add on, the IMF reports that advanced economies should see average inflation of 2.6% go down four-tenths of a percentage point from its October predictions with inflation set to reach central bank targets of 2% in 2025.
This report follows the positive news from yesterday where the United States Federal Reserve discussed the slowing of inflation and new numbers that reflect the country's economic resilience and strength despite inflation and other economic as well as global conflicts.
