The S&P 500 index opened this morning in green after the International Monetary Fund declared victory over inflation, which has been the focus of financial discussions since 2022.
The financial agency still sees significant risks in the economy.
In a morning report, it was argued that the geopolitical conflict could have a negative impact on growth over time.
IMF forecasts that global inflation will fall sharply from an average of 5.8% this year, to just 3.5% at the end 2025.
The annualized rate of inflation peaked in 2022 at 9.4%.
IMF forecasts global growth
IMF said that most countries had successfully controlled inflation and achieved a soft landing.
Even so, “the downside risks continue to increase and dominate the outlook”.
Fund expects global economic growth to be “stable but underwhelming”, 3.2%, both in 2019 and 2025.
It is convinced that AI investments will enable the United States to perform better than other emerging economies, particularly in Asia.
The International Monetary Fund, on the other hand lowered their expectations Tuesday for several advanced economies.
Included in this list were several emerging markets, as well as some of the biggest ones in Europe. They cited the risk associated with commodity prices and continued geopolitical tensions.
IMF urged global central banks also to be vigilant in reducing inflation and managing labour market conditions in the coming months.
Global growth could be affected by financial volatility
In its World Economic Outlook published on Tuesday, the IMF mentioned that increased financial volatility could pose a risk to growth globally.
The return of volatility in the financial markets over summer has sparked old concerns about hidden vulnerabilities.
The agency stated that this has increased anxiety about the correct monetary policy position.
The S&P 500 Index dropped as much as 10% in the three-week period ending August 5, .
The International Monetary Fund has continued to issue warnings about further turmoil, particularly if inflation continues at a stubborn pace in the coming months.
According to the IMF, global growth is being hampered by the war in Middle East, rising commodity prices and interest rates that have been elevated too long.
The fund believes that global growth will be limited to 3.1% by the 2020s.
The post IMF declares victory on inflation, but there are still economic obstacles may change as new information becomes available
This site is for entertainment only. Click here to read more
