The latest forecasts for the world economy from the International Monetary Fund (IMF) grapple with the central dilemma in trying to work out what happens next. Economic growth is holding up better than expected, particularly in the context of high energy costs. But the risks continue to grow, with the IMF highlighting the scale of government budget deficits and the damage which could results from a bursting of the AI bubble.
The fund has nonetheless edged up its forecast for global growth to 3.1 per cent this year and expects a lift to 3.4 per cent in 2027. Despite the fall-out from the wars in the Middle East and Ukraine, growth remains surprisingly steady.
“The global economy has been resilient” said IMF chief economist Silvana Tenreyro, “but that resilience is reaching its limits.” This may or may not be correct – the US economy, in particular, and its stock market, have…
