IMF: GLOBAL ECONOMY NEARING ‘SOFT LANDING’
Upgraded growth forecast of 3.1%, lower inflation among latest projections showing economic durability
The global economy has been battered by a pandemic, record levels of inflation, protracted wars and skyrocketing interest rates over the past four years, raising fears of a painful worldwide downturn. But fresh forecasts published Tuesday suggest that the world has managed to defy the odds, averting the threat of a so-called hard landing.
Projections from the International Monetary Fund painted a picture of economic durability — one that policymakers have been hoping to achieve while trying to manage a series of cascading crises.
In its latest economic outlook, the IMF projected global growth of 3.1 percent this year — the same pace as in 2023 and an upgrade from its previous forecast of 2.9 percent. Predictions of a global recession have receded, with inflation easing faster than economists anticipated. Central bankers, including the Federal Reserve, are expected to begin cutting interest rates in the coming months.
“The global economy has shown remarkable resilience, and we are now in the final descent to a soft landing,” said Pierre-Olivier Gourinchas, the chief economist of the IMF.
Policymakers who feared they would need to hit the brakes on economic growth to contain rising prices have managed to tame inf lation without tipping the world into a recession. The IMF expects global inflation to fall to 5.8 percent this year and 4.4 percent in 2025 from 6.8 percent in 2023. It estimates that 80 percent of the world’s economies will experience lower annual inflation this year.
The brighter outlook is due largely to the strength of the U.S. economy, which grew 3.1 percent last year. That robust growth came despite the Fed’s aggressive series of rate increases, which raised borrowing costs to their highest levels in 22 years. Consumer spending in the U.S. has held strong while businesses have continued to invest. The IMF now expects the U.S. economy to grow 2.1 percent this year, up from its previous prediction of 1.5 percent.
China’s economy is also growing faster than previously thought and is projected to grow 4.6 percent this year. IMF officials said the difficulties facing China’s property sector had not slowed the economy as much as they predicted; the Chinese government, they noted, has provided “significant” fiscal support.
Other large economies, such as
ate how they can reduce their emissions. But the suit argues that the law will be too burdensome and that the emissions data could contain inaccuracies that would mislead the public.
State Sen. Scott Wiener, a Democrat representing
San Francisco who authored the law, called the lawsuit “straight up climate denial.”
“The Chamber is taking this extremist legal action because many large corporations — particularly fossil fuel corporations and large banks — are absolutely terrified that if they have to tell the public how dramatically they’re fueling climate change, they’ll no longer be able to mislead the public and investors,” he said in a statement.
The business groups are also suing California over a new law requiring companies that make more than $500 million annually to report every other year how climate change will impact their finances and how they plan to adapt. The suit argues the state should not require companies “to speak about the effects of, and proper response to, climate change.”
Democratic State Sen. Henry Stern of Los Angeles, who introduced the financial disclosure legislation, said in a statement that the groups backing the suit were trying to undermine the state’s climate laws.
“It’s a cynical and dangerous ploy to bait the Supreme Court of the United States into a total rewrite of environmental federalism under the color of some contorted version of the First Amendment,” Stern said.