IMF says global economy ‘remains remarkably resilient’, and other economics news

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Joe Myers, Writer, Forum Agenda

• This weekly round-up brings you the latest news from the world of economics and finance.
• Top economy stories: Latest from the IMF on the global economy; German inflation slows; ECB likely to cut rates in June.

1. IMF says global economy ‘remains remarkably resilient’

The International Monetary Fund (IMF) has released its latest World Economic Outlook, projecting that growth will remain steady at 3.2% this year and next. The outlook suggests that global growth bottomed out at the end of 2022—at 2.3%—with inflation peaking shortly after.

“Most indicators continue to point to a soft landing,” Pierre-Olivier Gourinchas, the IMF’s Economic Counsellor and the Director of Research, wrote in a blog on the fund’s website.

He said the global economy “remains remarkably resilient”. Growth is steady and inflation continues to slow – “almost as quickly as it rose”. However, Gourinchas did warn of the numerous challenges that remain, which call for decisive actions. With risks including inflation and economic divergence, he called on policymakers to “prioritize measures that help preserve or even enhance the resilience of the global economy”.

The IMF has projected growth will hold steady this year and in 2025. Image: IMF

The IMF called for fiscal restraint, especially in a year of numerous elections worldwide, with the fund warning that budget overruns were more likely in election years.

“The most acute risk to public finances arises from the record number of elections being held in 2024, which has led to it being dubbed the ‘Great Election Year’,” it said in its new Fiscal Monitor publication.

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2. German inflation slows to near three-year low

Inflation in Germany eased further in March, falling to 2.3%. Price rises fell in Europe’s largest economy compared to February, when prices increased by 2.7% year-on-year. The figures are harmonized with those of other European countries.

The fall was helped by lower food and energy prices and represents the lowest inflation reading since June 2021.

“Inflation is weakening. We should therefore continue our fiscal policy, including the debt brake,” German Finance Minister Christian Lindner said on X, reports Reuters.

The debt brake, part of the German constitution, means the public deficit cannot rise above 0.35% of GDP.

3. News in brief: Stories on the economy from around the world

The Greek economy is set to grow by nearly 3% this year, almost returning to its 2009 pre-crisis size and far outpacing average growth in the eurozone of 0.8%.

Consumer inflation fell slightly more than expected in South Africa in March, dropping to 5.3% year-on-year, compared to 5.6% in February and beating economists’ prediction of 5.4%.

Nigerian inflation reached a 28-year high in March, rising to 33.2% year-on-year, mainly driven by rapid increases in food and energy costs.

US retail sales rose 0.7% in March, exceeding the 0.3% forecast by economists surveyed by Reuters.

India’s wholesale prices rose at their fastest rate in three months in March, increasing by 0.53%.

The European Central Bank has indicated there will be an interest rate cut in June.

The Chinese economy grew 5.3% in January-March, compared to the same period in 2023, having grown 5.2% in the previous quarter.

UK inflation has fallen to its lowest level since November 2021. Prices increased by 3.2% in March, year-on-year, down from 3.4% in February.

4. More on finance and the economy from Agenda

How can technology help drive financial inclusion? From education to accessibility, John Hope Bryant, the Founder, Chairman & CEO of Operation HOPE, explains how it’s already helped – and the potential that’s still untapped.

These five digital inclusion projects are helping to close the financial literacy gender gap across the globe. Read more about the initiatives and the work of the EDISON Alliance here.

What should businesses be focusing on in 2024? We asked leaders from several global companies for our Meet the Leader podcast.