The world economy will grow 2.9% this yearanticipated this Monday the International Monetary Fund (IMF)which improved its forecasts due to the lifting of the zero Covid policy in China and the receding specter of a recession in the euro zone.
The year “will continue to be challenging (…) but it could well represent a turning point,” said the IMF Chief Economist Pierre-Olivier Gourinchaswhen updating the economic perspectives of the organization, which forecasts China to grow 5.2% (+0.8 percentage points) and Germany and Italy avoid recession (0.1% and 0.6% GDP growth this year respectively).
He says that the world economy will grow this year more than expected, which improved its forecast due to surprisingly strong consumption and investment and momentum from the lifting of zero Covid restrictions in China.
The IMF expects the world economy to expand 2.9% this year, a percentage that is still low, according to the update of its World economy perspectives posted this Monday.
The year “will remain challenging… but it could well represent a turning point,” IMF chief economist Pierre-Olivier Gourinchas told reporters.
China paves the way to recovery by easing the restrictions imposed against Covid-19, but the raising central bank rates to combat inflationand Russia’s war in Ukraine continue to weigh on economic activity, the Washington-based organization says in its report.
“The Adverse risks have moderated. since the October forecast, the IMF added. The Fund now expects Germany and Italy to avoid recession as European growth proved “more resilient than expected” despite the war.
Latin America and the Caribbean will grow 1.8% this year, 0.1 percentage points more than anticipated in October, in a context marked by inflation and the war in Ukraine.
The Fund forecasts that Brazil’s economy will expand 1.2% (+0.2 percentage points) and Mexico’s 1.7% (+0.5 percentage points improvement).