MARRAKECH, Morocco – The International Monetary Fund on Tuesday cut its growth forecasts for China and the euro zone, and said overall global growth remained low and uneven despite what it called the “remarkable strength” of the United States economy.
Mr Gourinchas told Reuters it was too early to say how the major escalation would affect the global economy. Stronger growth is being throttled by the lingering impact of the pandemic, the Ukraine war and increasing fragmentation, along with rising interest rates, extreme weather events and shrinking fiscal support, the IMF said.
Inflation continued to decline around the globe due to a fall in energy prices and, to a lesser extent, food prices, but remained too high. It is expected to drop to an annual average of 6.9 per cent in 2023 from 8.7 per cent in 2022, and to 5.8 per cent in 2024. “We’re not seeing strong signs of an out-of-control sequence of wages chasing prices and prices chasing wages,” he told Reuters.
The IMF raised its forecast for US growth by 0.3 percentage point to 2.1 per cent for 2023, and by 0.5 percentage point to 1.5 per cent for 2024, citing stronger business investment and growing consumption. That makes the US the only major economy to beat pre-pandemic forecasts.
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