IMF Sees 'Pockets Of Resilience,' Slowing Momentum In The Global Economy

• The International Monetary Fund said on Thursday that first-quarter global growth slightly outpaced projections in its April forecasts, but data since then has shown a mixed picture, with "pockets of resilience" alongside signs of slowing momentum.
• The IMF said in a briefing note for a G20 finance leader’s meeting in India next week that manufacturing is showing weakness across G20 economies and global trade remains weak, but the demand for services is strong, particularly where tourism is recovering.
• The IMF did not indicate any changes to its April 2023 global GDP growth forecast of 2.8% - down from 3.4% in 2022 - but said that risks were "mostly" tilted to the downside. These include the potential for Russia's war in Ukraine to intensify, stubborn inflation and more financial sector stress that could disrupt markets.
• However, the Fund said that inflation "seems to have peaked" in 2022, and core inflation, while also easing, remains above targets in most G20 countries. “Reduced supply chain disruptions and lower goods demand mean likely disinflationary pressures from goods,” the IMF said.
• "However, services inflation - which is now the major driver of core inflation - is expected to take longer to decline," the IMF said. Strong consumer demand for services, buoyed by demand, strong labour markets and the post-pandemic shift in spending from goods to services, is likely to sustain these price pressures, the IMF said.

(Source: Reuters)