IMF signals improving economic projections, as optimism increases in Davos

At the World Economic Forum in Davos, Gita Gopinath, the IMF's deputy director, signalled that the fund would improve its economic forecasts. Instead of predicting a year of the most difficult “” along 2023, it now expected a “upgrade” in the second half of the year and in the year 2024.

Positive data from Europe and the US over the past few weeks has raised expectations that the world economy will avoid a recession this year.

Germany's Chancellor, Olaf Scholz, told Bloomberg that the Eurozone's biggest economy will avoid a recession, while the Manheim-based ZEW Institute said its monthly indicator for measuring the investors' session had returned to positive figures for the first time since the Russian invasion of Ukraine.

Daniel Pinto, head of JPMorgan's investment bank, stressed the stability of the global economy. “We have passed a period of war, with pandemic, as well as the largest normalisation of monetary policy in history”, he said. “Taking into account all the things that have happened, the world is much better than we should have expected. ”

Although the economic downturn in advanced economies does not seem as bad as thought, China's economic growth has slowed, as Beijing marked a disappointing rate of 3 percent for 2022.

Gopinath warned that the year 2023 would still be a difficult “ ”. With inflation still in very high numbers, central banks must continue to raise interest rates until inflation falls steadily, she said.

However, financial markets have improved due to lower energy prices, reducing difficulties in the chains of supplies, and completing China's zero-Covid policy.

Liu He, Beijing's top economic official, told the forum that China's economy would recover. “If we work hard, we are confident that growth will most likely return to its normal trend,” he said. “The Chinese economy will have a significant improvement in 2023.”/ FT