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Global Recovery Endures but Road Is Getting Rocky
The global economy’s gradual recovery remains on track and growth will bottom out this year before rising slightly next year, the IMF’s Chief Economist Pierre-Olivier Gourinchas said at a press briefing on the IMF’s latest World Economic Outlook. Growth this year would be 2.8 percent before rising modestly to 3 percent next year—0.1 percentage points below January’s projections. Global inflation will fall, though more slowly than initially anticipated, from 8.7 percent last year to 7 percent this year and 4.9 percent in 2024, he added.
Gourinchas said brief instability in the United Kingdom’s Gilt market and banking turbulence in the United States illustrated significant vulnerabilities and warned that the financial sector could be tested again. A sharp tightening of global financial conditions—sometimes called a risk-off event—would have a dramatic impact, in emerging market and developing economies especially. In such a severe downside scenario, global growth could fall to about 1 percent this year, Gourinchas said.
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