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July 25, 2023
International Monetary Fund (IMF) updates its World Economic Outlook.
Washington, DC, July 25, 2023 — The International Monetary Fund (IMF) announced in a press briefing on July 25, 2023, that the global economy is gradually recovering from the pandemic and Russia’s invasion of Ukraine. The briefing marked the release of July’s update of the World Economic Outlook report.
According to the IMF’s baseline forecast, global growth will slow from 3.5% in 2022 to 3.0% this year and the next. However, this is an upgrade of 0.2 percentage points for 2023 from the IMF’s April projections.
IMF’s Chief Economist, Pierre-Olivier Gourinchas, stated that global economic activity has been resilient in the first quarter of this year, resulting in a modest upward revision for global growth in 2023. Although some positive changes have occurred since April, such as the recovery of supply chains and the decrease in COVID-19 cases, inflation remains high, and monetary policy tightening has raised borrowing costs, constraining economic activity. Gourinchas expressed concern about medium-term growth prospects and declining household purchasing power.
While some adverse risks have moderated, the balance remains tilted to the downside. Gourinchas highlighted that the main policy priority now is to conquer inflation. Central banks in economies with elevated and persistent core inflation should continue to signal their commitment to reducing inflation. Fiscal policy should tighten to rebuild fiscal buffers and reinforce the overall credibility of disinflation strategies, with targeted support for the most vulnerable.
Improvements to the economy’s supply side would facilitate fiscal consolidation and a smoother inflation decline toward target levels. Gourinchas urged urgent action to strengthen global cooperation on climate policies, international trade, or debt restructuring to address common challenges. The outlook has improved since April, but the balance of risks remains tilted downward, IMF concluded.
Source: IMF
|GlobalGiants.Com|
— The Editor is a Financial Market Analyst with IMF Academic Certification.
Edited & Posted by the Editor | 3:41 PM | Link to this Post
