The IMF’s warning came alongside new forecasts showing the Australian economy will grow at a historically slow pace this year.
Already a subscriber?Re-accelerating inflation could force investors to dump rate cut bets and cause a widespread sell-off in global asset markets, the International Monetary Fund has warned alongside new forecasts showing the Australian economy will grow at a historically slow pace this year.
“While global inflation remains a key concern, the balance of risks is shifting from inflation to growth – and the concerns about the outlook for the Chinese economy and increased tensions in the Middle East are adding to uncertainty,” Dr Chalmers said. Asset price volatility had fallen markedly despite measures of economic uncertainty reaching elevated levels, the IMF said in its half-yearly global financial stability review.
“Under this scenario, financial conditions would broadly tighten. Most immediately, some investors would face losses on the assets they hold, especially leveraged investors whose negative returns would be magnified.” The burden of high interest rates has forced households to eat into their savings. Excess savings accumulated by Australians during the pandemic have declined to about 3.5 per cent of GDP from a peak of about 11 per cent, the IMF found.
Growth in the global economy is forecast to hold steady at 3.2 per cent in both 2024 and 2025, with a large near-term upward revision in US activity offset by declines in forecast GDP growth in most other advanced economies.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Meera Sodha’s vegan recipe for a sticky Easter ginger loaf cakeUnlike the other giants of teatime cakes, this delicious Jamaican ginger cake is rarely made at home or vegan, so I’m tackling two birds with one stone
Read more »
US banks in a sticky situationReaders’ letters on the looming commercial real estate threat to the US economy; how the AUKUS deal may be taking us for a ride; the difference between decision-making and execution; and a regular correspondent’s call to arms.
Read more »
China at ‘fork in the road’ on reforms to boost demandIMF head Kristalina Georgieva says the world is heading for subdued growth.
Read more »
Industrial policy: IMF warns taxpayer support for high-tech manufacturing could backfireWhile industrial policy can fuel innovation if done right, the International Monetary Fund said history was “full of cautionary tales of policy mistakes [and] high fiscal costs”.
Read more »
Australian households are world-leaders in interest rate pain: IMFVariable-rate mortgages and high household debt make Australian consumers highly sensitive to interest rates, the IMF says, but house prices are still rising.
Read more »
Are the octogenarian IMF and World Bank sprightly enough for the job?Fragile recovery, low growth, global debt, AI, the climate … The organisations founded in 1944 have lots to talk about this week. They hold their half-yearly meetings in Washington this week. Not because the world is crisis-free – it clearly isn’t – but because since they met six months ago no fresh crisis has emerged. The past half-decade has been as tough as any period in the history of the two organisations. First there was the pandemic, then the surge in inflation as lockdown restrictions were lifted. The cost of living problems were amplified by the war in Ukraine. Then, last October, two days before the start of the IMF/World Bank meetings in Marrakech – and just as things appeared to be calming down – Hamas launched its attack on Israel., the IMF’s managing director, nor World Bank president Ajay Banga would be foolish enough to rule out a fresh, unexpected setback. The war between Israel and Hamas could suddenly explode into a wider Middle East conflict
Read more »