The International Monetary Fund’s forecast for global economic growth just got sunnier, with inflation easing faster than expected in the world’s largest economies.
“The global economy continues to display remarkable resilience, with inflation declining steadily and growth holding up. The chance of a ‘soft landing’ has increased,” IMF chief economist Pierre-Olivier Gourinchas said Tuesday, adding that a global recession seems unlikely.
The IMF attributed the improved outlook to stronger private and public spending, increased labor force participation, mended supply chains, and cheaper energy and commodity prices. However, geopolitical tensions in the Middle East and attacks in the Red Sea could threaten the positive outlook, Gourinchas said.
Eurozone skirts recession, but stagnation concerns economists
The eurozone economy narrowly avoided an anticipated recession, the European Union reported Tuesday, stabilizing in the final quarter of last year. But the newly-published numbers raised concerns that the economy has stagnated as the high cost of living squashed consumer spending, and industries like energy and manufacturing slumped. The IMF report cited “notably subdued” growth in Europe.
“The anemic pace is keeping Europe far behind the United States,” where consumer spending and aggressive interest rate increases continue to power the economy, The New York Times reported. Europe has taken similar steps to hike interest rates, and an Oxford economist told the Times that he expected the measures to work: “We anticipate fading headwinds in Europe to support a recovery in growth throughout 2024.”
Chicken prices expected to fall in US
Chicken prices hit record highs last year, but U.S consumers could soon feel some relief thanks to the “unlikely ally” of the renewable fuel industry, Bloomberg reported. Making plant-based fuel creates significant amounts of byproduct that can be used as animal feed, the outlet noted, so meat farmers can spend less to feed their livestock. Those savings are likely to be passed on to consumers. “Protein in all forms will get a little less expensive,” one agricultural consultant told Bloomberg. That drop could help reign in the cost-of-living crisis, which saw U.S. grocery prices increase 25% since January 2020.
Cost-of-living crisis has negatively affected mental, physical health
A recent survey of 16 to 25-year-olds in the U.K. found that nearly half think the cost-of-living crisis has had a worse impact on their life than the pandemic. British bank NatWest’s survey said that young people’s happiness and confidence with money has “hit the lowest level on record” since it began polling on the issue in 2008. In Wales, the nation’s public health agency found that not being able to afford high rents or mortgages is having a negative impact on mental health. Residents are increasingly opting to turn off the heat to save money on energy bills, causing physical health problems as well, Public Health Wales said.