IMF update

 

Dear MARIA, We just published a new blog—please find the full text below.  Top 10 Blogs of 2023 Unpack Global Economy, Inflation, Debt, Trade and Asia (Credit: Adobe Stock and IMF) By Jeff Kearns The global economy showed signs of resilience at the beginning of this year as central bank campaigns to contain inflation started to pay off and China scrapped pandemic restrictions. While the recovery endured, price increases proved persistent and the outlook for world economic growth five years out weakened to a historically low level. Despite persistent challenges, signs of progress were undeniable by mid-year, and the likelihood of a so-called soft landing had increased in the final months of 2023. Against this backdrop, this year’s most-read blogs reflect attention to prospects for growth, interest rates, and how high borrowing costs affect people and businesses. Readers also focused on Asia, which was the main growth driver among major regions, and Europe, where inflation debates centered on corporate profits and wage gains. Central bank digital currencies, climate change, debt, and geoeconomic fragmentation also remained popular—and may still be next year, as the issues remain just as pressing. Click on the images below to read the blogs. Global Economy to Slow Further Amid Signs of Resilience and China Re-opening The fight against inflation is starting to pay off, but central banks must continue their efforts Europe’s Inflation Outlook Depends on How Corporate Profits Absorb Wage Gains Higher prices so far mostly reflect increases in profits and import costs, but labor costs are picking up Interest Rates Likely to Return Toward Pre-Pandemic Levels When Inflation is Tamed How close will depend on the persistence of public debt, on how climate policies are financed and on the extent of deglobalization Resilient Global Economy Still Limping Along, With Growing Divergences Likelihood of a soft landing has increased, but growth forecast is lowest in decades Fossil Fuel Subsidies Surged to Record $7 Trillion Scaling back subsidies would reduce air pollution, generate revenue, and make a major contribution to slowing climate change Higher-for-Longer Interest Rate Environment is Squeezing More Borrowers Elevated inflation means central banks may have to keep policy rates higher in a way that stretches the capacity of borrowers to repay debt Confronting Fragmentation Where It Matters Most: Trade, Debt, and Climate Action Fragmentation could make it even more difficult to help many vulnerable emerging and developing economies that have been hard hit by multiple shocks Central Bank Digital Currency Development Enters the Next Phase Many of the world’s monetary authorities are seeking more guidance on how best to pursue digital forms of central bank money Global Debt Is Returning to its Rising Trend  Although global debt recorded another significant decline in 2022, it is still high, with debt sustainability remaining a concern Asia Poised to Drive Global Economic Growth, Boosted by China’s Reopening China and India together are forecast to generate about half  Jeff Kearns Managing Editor IMF Blog jkearns@IMF.org   Thank you again for your interest in IMF Blog. Read more of our latest content here. Take good care!