The global economy will grow more this year than previously expected, the International Monetary Fund said, with booming investment in AI outweighing a fast-growing debt pile — for now. The marginal upgrade in the IMF’s outlook nevertheless represents a slowing in the pace of overall expansion, while the fund also increased its expectations for inflation and warned that a number of buffers, including global energy stockpiles and fiscal capacity, were eroding to worrying levels.
In particular, the IMF said the world’s biggest economies had to take “urgent” action to rebuild their public finances, with deficits at their biggest since the pandemic. “The global economy has been resilient,” a fund economist warned, “but that resilience is reaching its limits.”
— Prashant Rao