BancaMarch: The IMF warns of the possible persistence of inflation, in the face of potential trade and geopolitical risks and service prices that remain high due to wage growth. The IMF’s report forecasts high interest rates for longer. Moreover, chief economist Gourinchas said that the Fed can afford to wait to cut rates to avoid inflationary surprises.
Regarding their GDP growth projections, they have kept the previous April estimate for the world economy in 2024 unchanged at 3.2%, and have increased the 2025 estimate by one tenth of a percentage point to 3.3%.
By regions, of note is the upward revision of 0.4 p.p. in China’s growth for this year, reaching 5% -in line with the government’s target- due to the recovery of private consumption and strong exports.
The IMF also raised its forecast for 2025 to 4.5% from 4.1%. Gourinchas said the new data – GDP growth in the first quarter was 4.7% – posed a risk to the IMF’s forecast. In the US, the 2024 estimate was lowered by one tenth of a percentage point to 2.6% and the 2025 estimate was left unchanged at 1.9%. Finally, in the eurozone, it was raised by one tenth of a percentage point for 2024 to 0.9% and left unchanged for 2025 at 1.5%.
