10 months ago • 2 mins
The International Monetary Fund (IMF) brightened its global growth outlook for the first time in a year this week.
What does this mean?
The IMF spent much of 2022 crooning a warning song about a coming global recession, but all of a sudden it’s changed its tune. In fairness, China's dropped its zero-Covid policy since the organization's last update, and energy prices in Europe have eased up a tad too. Even US spending’s holding up well – all of which suggests the global economy isn’t as weak and pale-faced as it once seemed. That said, the West’s still taking a back seat in this revised outlook: India and China are expected to make up half of the world’s growth between them, with India pegged to be the fastest-growing big economy. The US and Europe, on the other hand, are expected to make up a measly 10%. All in all, the IMF thinks the global economy will grow 2.9% this year, and accelerate to 3.1% in 2024.
Why should I care?
Zooming in: Hard luck, chaps.
The forecast didn’t get brighter for everyone, mind you: the IMF downgraded the UK’s prospects big time, labeling Britain as the only major advanced economy set to contract this year – with even sanction-hit Russia due to outpace it. And as for why, you don’t need to dig any deeper than the country’s shrunken labor force, rising mortgage costs, and planned tax hikes, all of which are dragging on the economy.
The bigger picture: Get hit and keep moving forward.
Right on cue, the eurozone came along and justified the IMF’s optimism, with data out on Tuesday showing the region grew by 0.1% from the third to fourth quarter last year. That means the region’s economy grew in every quarter of 2022, despite facing an energy crisis and a literal war – a fact that’s got folk hoping it’ll sidestep a recession completely.
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