WASHINGTON—Resilient demand, easing inflation and China’s reopening should allow the global economy to grow a bit faster than previously expected, the International Monetary Fund said.

In its latest World Economic Outlook, released Monday Washington time, the IMF sees the global economy growing 2.9% this year, up from its October projection of 2.7%. The IMF expects growth to accelerate to 3.1.% in 2024, still less than last year’s 3.4%.

I'm a perennial bear, but I did not expect a Recession in the near term, and now the figures back it up.

 

There was so much pent up demand due to Covid that many people are throwing caution to the wind and doing what they were prevented from doing for 2 years. Travel is booming, even to Thailand. People continue to buy cars in the US. Interest rates have hit house prices, but even that is regional. Some areas continue to grow. Unemployment in the US is 3.5%, down sharply from the 6.8% Biden inherited from 45.

 

Inflation is dropping rapidly. Natural gas prices are lower than when russia invaded Ukraine. That impacts fertilizer prices,in a good way, which in turn helps with the cost of food. The winter has been warmer than expected in much of the EU, and despite the every fortnight cold snap in the US, overall weather hasn't been as severe as normal.

 

Now the bad news is that a  lot of this spending is debt based, and with interest rates climbing people who fail to pay off credit card balances are looking at 30%+ rates on unpaid balances.

 

I do think we have a good chance of a Recession starting later in 2023, as consumers reach their credit limit, but until then, we'll make hay while the sun shines.

I was under the impression that the economy was contracting due to recent massive tech layoffs (microsoft, facebook, ibm, ...)