The International Monetary Fund raised its growth forecast for the international economy on Tuesday despite slowing activity in China, according to CNBC.
What’s going on: “In the latest update to its World Economic Outlook, the IMF raised its 2023 global growth prediction by 0.2 percentage points to 3%, up from 2.8% at its April assessment. The IMF kept [its] 2024 growth forecast unchanged at 3%.”
- The IMF expects inflation to improve, too, and sees core inflation “declining more slowly to 6% this year, from 6.5% last year.”
- IMF Chief Economist Pierre-Olivier Gourinchas wrote in a blog post Tuesday that “the signs of progress are undeniable.”
However … Global economic challenges remain on the horizon, the IMF cautioned, citing a less-than-robust Chinese economic recovery from the pandemic, weakness in China’s real-estate market and an expected contraction of Germany’s economy.
- In Germany, manufacturing output declined in Q1 2023.
- Across nations that use the euro, “[d]ata released Monday showed business activity shrinking at a faster pace than expected.”
Our take: “While there continue to be significant challenges in the manufacturing sector globally, it is encouraging to see signs of resilience—not just in the U.S. economy, but in other markets as well,” said NAM Chief Economist Chad Moutray.