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IMF Boosts US Growth Forecast for 2024 by 0.6%, Declares Progress “Impressive”

The International Monetary Fund (IMF) predicts that the GDP of the United States (USA) will grow 2.7% this year, six tenths more than in the projection it made last January, and highlights that the “exceptional” evolution and “impressive” of its economy, which pushes that of the rest of the world.

“He exceptional performance recent development of the United States is certainly impressive and one of the main drivers of global growth,” says the IMF’s global economic outlook report (WEO) released this Tuesday.

”Surprisingly, the US economy has surpassed its pre-pandemic trend” indicates the report.

The body also improves growth estimate for 2025 by two tenths to 1.9% a slowdown which is explained by “a gradual fiscal adjustment and a softening in the labor markets that will slow down aggregate demand.”

However, remember that this unexpected resilience of the economy The US could put at risk the moderation of inflation, which refuses to fall below 3% and remains far from the 2% target.

The strength of the dollar, the report recalls, has consequences for the rest of the world’s economies, especially for developing ones, and raw materials markets, which can negatively affect global growth and create “greater global divergences” between countries.

”Persistent and unexpected inflation in the US could, for example, trigger an upward revision of interest rate expectations in the US and cause an appreciation of the US dollar. In some cases, such developments could put the financial sector under pressure,” the report notes.

The rise in inflation, the rise in the price of oil or a slower process of lowering interest rates are some of the risks that the world economy faces if there is an escalation of tension in the Middle East, warned this Tuesday the International Monetary Fund (IMF).

“We are concerned about the possibility that geopolitical risk will affect commodity markets and, therefore, trade and the global economy,” the IMF’s chief economist, Pierre Pierre-Olivier Gourinchas, said in an interview with EFE.

What happened with Iran’s attack on Israel this weekend “It’s not a good development for the global economy, but it’s a little early to really assess whether this will have a significant impact.” Gourinchas stated.

The IMF published this Tuesday its latest World Economic Outlook (WEO) report in which it raised the global growth for this year, up to 3.2%.

The report also highlights the “surprising resilience” of the economy, despite geopolitical tensions due to the wars in Ukraine and Gaza and the increasing fragmentation of world trade.

Although the scope so far of the Gaza war, which started six months ago, has been moderate, the IMF draws in its report a scenario of a possible worsening of global growth due to the conflict.

Additionally, it could lead to higher oil and energy prices, shipping costs, and food prices.

”If we had a 15% increase in the price of oil and a significant increase in shipping costs, then there would be an impact on global inflation, which would increase by around 0.7 percentage points in 2024,” Gourinchas explained.

(with information from EFE)

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