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IMF: ‘Economic recovery on firmer footing’

, July 24, 2017, 0 Comments

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The International Monetary Fund has said it believes in an even broader economic upswing globally in the years ahead. The lender’s latest revision of its quarterly growth outlook also bodes well for the eurozone.

Presenting their latest update of the World Economic Outlook, IMF officials on Monday said there was no question mark over the global economy’s gain in momentum.

“The recovery in global growth that we projected in April is on a firmer footing,” IMF Chief Economist Maurice Obstfeld said in a statement.

He added that recent data including faster growth in trade suggested that the world economy was entering its “broadest synchronized upswing” of the last decade.

In its July revision issued in Kuala Lumpur, the International Monetary Fund also raised its forecast for the eurozone, expecting its economy to expand by 1.9 percent this year and 1.7 percent in 2018.

Thumbs up for euro area

Europe’s powerhouse, Germany, would stay slightly below the eurozone average, clocking expansion rates of 1.8 percent in 2017 and 1.6 percent next year, the IMF calculated.

The cyclical upswing in the whole of Europe could outperform expectations, the Washington-based lender said. But it did not fail to mention some growth risks including high share prices across advanced economies as well as China’s expansionary policies, which might negatively impact financial stability mid-term.

The lender added that the US Federal Reserve’s gradual move to raise interest ratesand take cash out of bond markets could also risk “over-tightening of financial conditions.”

The most important lowered outlook was for the United States, where the IMF slashed its expectations for expansionary federal budget policies as President Donald Trump’s plans for tax cuts and infrastructure spending had yet to gain traction in Congress.