HomeFinance NewsEconomyIMF Insider Drops Bomb: Global Recession 'Highly Unlikely,' Path to Prosperity Ahead

IMF Insider Drops Bomb: Global Recession ‘Highly Unlikely,’ Path to Prosperity Ahead


Risk of a global recession is minimal, IMF economist says — would take ‘a lot to derail’


Despite concerns over geopolitical uncertainty, the International Monetary Fund (IMF) believes the risk of a global recession remains low.

This optimism stems from positive economic indicators, including strong growth in the U.S. and emerging market economies, as well as a decline in inflation.

Pierre-Olivier Gourinchas, the IMF’s economic counselor, maintains that “a lot” would have to occur to derail the current economic momentum.

He attributes the resilience to the U.S.’s robust performance, the recovery of several emerging markets, and the faster-than-anticipated easing of inflation, despite Europe’s slower growth.

However, European economies are experiencing mixed fortunes.

While Italy, France, and Germany have seen a downward revision in growth forecasts, the outlook has improved for Spain, Portugal, Belgium, and the U.K.

Despite these favorable projections, the IMF acknowledges potential risks arising from escalating tensions in the Middle East.

A sustained increase in oil prices and disruptions in shipping routes between Asia and Europe could fuel inflation in 2024, leading to higher interest rates and reduced global growth.

Gita Gopinath, the IMF’s deputy managing director, emphasizes that geopolitical risks remain a concern.

The conflicts in the Middle East, including Israel’s war with Hamas and the ongoing Russia-Ukraine conflict, could have significant implications for oil prices.

Worsening conflicts could potentially escalate and weigh heavily on the global economy.

Overall, while the IMF is cautiously optimistic about global economic prospects, it warns that geopolitical risks, particularly in the Middle East, could threaten the current growth trajectory.

  • Overall sentiment: positive
  • Positive

    “The risk of a global recession is “fairly minimal,” Pierre-Olivier Gourinchas, the International Monetary Fund’s economic counsellor, told CNBC.”

    “One of the International Monetary Fund’s top economists signals little risk of a global recession, despite the ongoing rumblings of geopolitical uncertainty.”


    “Threats to economic growth remain from escalating tensions in the Middle East.”

    “By the IMF’s estimate, a consistent rise in oil prices of around 15% in 2024 would push up global inflation by around 0.7%, though the value of the commodity has so far proved relatively stable even through the recent spike in Israel-Iran tensions.”

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