The International Monetary Fund has upgraded its outlook for the global economy, saying the world appears headed for a “soft landing” — reining in inflation without much economic pain and producing steady if modest growth.
FILE - People pose for a photograph next to an International Monetary Fund banner, during the World Bank/IMF spring meetings at IMF headquarters in Washington, April 11, 2023. The International Monetary Fund has upgraded its outlook for the global economy in 2024, saying the world appears headed for a"soft landing" reining in inflation without much economic pain and producing steady if modest growth.
The Federal Reserve, the Bank of Japan, the European Central Bank and the Bank of England have all sharply raised rates with the aim of slowing inflation to around 2%. In the United States, year-over-year inflation has plummeted. Still, U.S. inflation remains persistently above the Fed's target level, which will likely delay any rate cuts by the U.S. central bank.
Though the world economy is showing unexpected resilience, it isn't exactly strong. From 2000 through 2019, global economic growth had averaged 3.8% — much higher than the 3.2% IMF forecasts for this year and next. Keeping a lid on the world's growth prospects are the continued high interest rates, along with sluggish gains in productivity in much of the world and the withdrawal of government economic aid that was rolled out during the pandemic.
Among the 20 countries that use the euro currency, the IMF expects growth of just 0.8% this year — weak but double the eurozone’s 2023 expansion. The United Kingdom is expected to make slow economic progress, with growth rising from 0.1% last year to 0.5% in 2024 and 1.5% next year.
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