The International Monetary Fund (IMF) is convinced that the world economy is headed for a so-called soft landing, that is, that it will manage to return to lower inflation without a recession emerging. Interest rates will then start to decrease around the middle of the year. IMF chief Kristalina said this at the World Summit in Dubai today Georgieva .
Soft landing
“We are really sure that the world economy is now, after some of the sharpest interest rate hikes in the last decade, ready for the soft landing we dreamed of,” said Georgieva .
On the prospect of interest rate cuts in key economies such as the United States, the head of the monetary fund said she expected interest rates to move in the direction that inflation has been moving in the last year by the middle of this year. And she slows down.
Risk in the canal
Georgieva also pointed out that a protracted war between Israel and the Hamas movement would have adverse effects on individual economies. “I am most worried about the long duration of the conflict, because if it continues, the risk of side effects will increase ,” she said.
At present, the risk can be seen to be spilling over into the Suez Canal, she said, citing recent attacks on merchant ships in the Red Sea. But if there are other unintended connections, such as when the fighting spreads , it could be much more problematic for the world as a whole.
At the end of January, the IMF improved its estimate of this year’s growth of the world economy to 3.1 percent, while last October it counted on growth of 2.9 percent. He justified the improvement in the forecast with more favorable economic prospects in the US and in some large emerging economies. The growth rate of the global economy should thus remain the same as last year.
source: ČTK
