Global Economy Displays Resilience, US Positioned for Gentle Economic Landing: IMF
"China recognizes that unless they move forward with difficult structural reforms, they will see growth dipping under 4%," stated Georgieva, emphasizing China's determination to stay engaged internationally.
Karobar
The International Monetary Fund (IMF) anticipates a positive trajectory for the global economy in 2024, buoyed by a slightly stronger performance in the previous year, as stated by Managing Director Kristalina Georgieva.
Georgieva refrained from providing specifics on the upcoming January revision of IMF forecasts but highlighted the likelihood of a "soft landing" for the US economy, citing the expected decline in interest rates, according to Bloomberg reports.
Addressing an event at Bloomberg House in Davos, Georgieva expressed optimism, stating, "The world economy has proven to be remarkably resilient," and added that 2023 performed slightly better than anticipated, with positive momentum expected to carry into 2024.
This positive outlook was echoed by First Deputy Managing Director Gita Gopinath during a Davos panel discussion. Gopinath noted a significant increase in the probability of a "soft landing" and cautioned that market expectations for rapid interest-rate cuts might be premature.
Economic dynamics have shifted since the IMF's October forecast of 2.9% growth for the current year. While the possibility of inflation receding without triggering recessions in major economies exists, geopolitical challenges, such as the prolonged Israel-Hamas conflict and Houthi attacks in the Red Sea, pose threats to stability, potentially leading to new price pressures and supply-chain disruptions.
Regarding China, Georgieva urged the Xi Jinping administration to persist in opening up state-owned enterprises, addressing local government-debt concerns, and resolving issues in the real estate sector to prevent the economy from falling into a low-growth trap.
The second-largest global economy is set to release figures for gross domestic product, industrial production, and retail sales for the previous year on Wednesday, offering insights into its ability to sustain momentum in the current year. It is widely anticipated that Beijing will set the 2024 growth target at around 5% again.
