The US economy is thriving despite slowing pandemic recovery, with low unemployment and high spending. However, this strength poses a challenge in addressing rising inflation. The IMF projects continued growth, higher than Europe's, but warns that overheating is a risk. To tackle inflation, the Federal Reserve will keep interest rates high, despite concerns, as the economy remains resilient and robust.
Global economic growth remains steady at 3.2%, but below past averages due to factors like declining productivity and reduced investment. Artificial intelligence shows potential for growth, but its impact is uncertain. Inflation is projected to decline, but geopolitical tensions could affect it. Interest rates may change, depending on factors like inflation. Trade disruptions and fragmentation pose risks, but early action can mitigate them. China's economy remains resilient, despite property sector challenges, and support measures are encouraged.
High valuations of companies may pose a risk to the economy, warns the IMF. This optimism has pushed valuations to unsustainable levels, making them vulnerable to shocks. Credit markets, especially for riskier borrowers, are a particular concern, as well as commercial real estate, due to the shift to remote work. The IMF highlights that inflation remains a risk, as does uncertainty around interest rates.
Despite economic challenges, the International Monetary Fund raised its global growth forecast slightly to 3.2% in 2024. The IMF notes the economy's resilience, with growth led by advanced economies. However, risks remain, including the downturn in China's economy and potential price spikes due to geopolitical concerns. Inflation is expected to continue falling, but the focus remains on ensuring a soft landing by balancing interest rate policies and fiscal consolidation.
The US Treasury Secretary, Janet Yellen, stated that future talks between the US and China will focus on the need for Beijing to shift its industrial and economic policies. Yellen believes China's overcapacity in certain sectors has been harming other countries' economies. She and Chinese officials discussed Beijing's economic plans, but further details were not provided. The topics of national security and information exchange on economic tools were also discussed during Yellen's visit to China.
Nigeria's economy faces significant challenges with inflation at 29.9%, a plummeting currency, and high cost of living. Government reforms have led to surging inflation, despite social protection measures and efforts to boost production. Food insecurity affects 8% of the population, while the central bank raises interest rates to combat inflation. Private sector growth is slowing, and economic experts forecast modest growth in 2024. Addressing price pressures and insecurity remains crucial.
