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IMF Chief Economist Pierre-Olivier Gourinchas
Despite the economic turmoil presented by the COVID-19 pandemic over the last four years, the International Monetary Fund (IMF) says it expects less economic scarring than initial projections.
IMF Chief Economist Pierre-Olivier Gourinchas said although estimates vary across countries, the US economy, for instance, has already surged past its pre-pandemic trend.
But he said new spikes from geopolitical tensions, like the ongoing Russia-Ukraine war and Israel-Hamas conflict, as well as persistent core inflation or a disruptive turn towards fiscal adjustment could slow activity.
These risks could also hit low-income countries harder, as many are still struggling to turn the page from the pandemic and cost of living crisis.
Still, Mr. Gourinchas said risks are now broadly balanced, with some upside trends.
"Faster disinflation or timely structural reforms that boost productivity could support activity. Insufficient action on the fiscal front could also stimulate growth, although this could force a more costly adjustment later on," he noted.
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