FX.co ★ IMF Raises Global Growth Forecast, Warns of Risks

The International Monetary Fund (IMF) has revised its global growth forecast upwards to 3.3% from the previous 3.1% for this year, while also highlighting the emergence of significant risks. This revision is attributed to robust economic activities, strong labor markets, and substantial investments in cutting-edge technologies, notably artificial intelligence. Despite these positive indicators, the IMF warns that these factors might also lead to potential instability. The surge in AI-driven investments, particularly in North America and Asia, is buoying both growth and equity markets. However, should the anticipated productivity enhancements fail to occur, it could result in severe market adjustments and a decline in household wealth. Trade and geopolitical tensions continue to pose considerable concerns. Although the effects of past tariffs are waning, any new disputes or a shift towards protectionist policies could undermine corporate profits and perpetuate inflationary pressures. On a regional scale, the IMF anticipates steady growth in the United States (2.6% by 2026), moderate progress within the Euro Area (1.3%), and more vigorous growth in China (4.5%), highlighting an uneven yet resilient global economic outlook.