IMF sees 'soft landing' on horizon

Organization raises outlook, predicting 3.2% expansion this year up from 3.1% forecast in January

- PAUL WISEMAN

Pierre-Olivier Gourinchas, chief economist of the International Monetary Fund, said Tuesday that the global economy "continues to display remarkable resilience."

The International Monetary Fund has upgraded its outlook for the global economy this year, saying the world appears headed for a “soft landing” — reining in inflation without much economic pain and producing steady if modest growth.

The IMF now envisions 3.2 per cent worldwide expansion this year, up a tick from the 3.1 per cent it had predicted in January and matching 2023’s pace. And it foresees a third straight year of 3.2 per cent growth in 2025.

In its latest outlook, the IMF, a 190-country lending organization, notes that the global expansion is being powered by unexpectedly strong growth in the United States, the world’s largest economy. The IMF expects the U.S. economy to grow 2.7 per cent this year, an upgrade from the 2.1 per cent it had predicted in January and faster than a solid 2.5 per cent expansion in 2023.

Though sharp price increases remain an obstacle across the world, the IMF foresees global inflation tumbling from 6.8 per cent last year to 5.9 per cent in 2024 and 4.5 per cent next year. In the world’s advanced economies alone, the organization envisions inflation falling from 4.6 per cent in 2023 to 2.6 per cent this year and two per cent in 2025, brought down by the effects of higher interest rates.