‘Battle against inflation is almost won’ says IMF chief economist

As a seasoned analyst with over two decades of experience navigating global economic landscapes, I find the latest IMF report intriguing yet cautiously optimistic. While I concur that a decline in inflation could provide much-needed relief for consumers and stimulate growth, it is essential to consider the uncertainties and potential pitfalls highlighted by the IMF itself.

According to the International Monetary Fund’s recent forecast, global inflation – a factor that has dampened the performance of risky investments such as cryptocurrencies and tech stocks – is expected to decrease to around 3.5% by the year 2025. This optimistic projection is largely attributed to the robustness of the worldwide economy.

According to IMF Chief Economist Pierre-Olivier Gourinchas, who spoke on October 22, our fight against inflation is nearing its end. As high as 9.4% yearly in the third quarter of 2022, we anticipate that by the close of next year, the overall inflation rate will have dropped to a more manageable 3.5%.

‘Battle against inflation is almost won’ says IMF chief economist

“In most countries, inflation is now hovering close to central bank targets. Now inflation came down while the global economy remained resilient. Growth is projected to hold steady at 3.2% in 2024 and 2025,” he added.

A reduction in inflation could bring about numerous advantages, including a lower cost of living and suppressed interest rates. Such conditions might prove beneficial for high-risk investments like cryptocurrencies.

Nevertheless, Gourinchas pointed out that the ongoing geopolitical conflicts and trading disputes in the Middle East, along with an upcoming U.S. Presidential election, continue to generate a significant amount of uncertainty.

“These downside risks include an escalation in regional conflicts, especially in the Middle East, which could pose serious risks for commodity markets.”

In contrast to their inflation forecast, the IMF recommended a three-pronged policy adjustment: adjusting interest rates, managing government expenditure, and implementing crucial reforms to stimulate productivity growth.

The report considered a decrease in inflation alongside an avoidance of a worldwide economic downturn to be a “significant milestone.” Nevertheless, it acknowledged that the forecast for the global economy’s development stayed much the same and remained at its “least robust state in many years.

‘Battle against inflation is almost won’ says IMF chief economist

As a crypto investor, I’m optimistic about the future, particularly in the context of global economic growth. I believe the United States stands poised for rapid expansion, according to the IMF’s forecasts. Moreover, I’m excited about the prospect of robust development in emerging Asian economies, given the significant investments being made in artificial intelligence technologies.

Yet, the organization revised its forecast for other developed nations, like major European countries and certain emerging markets, predicting a downgrade. This is primarily due to escalating international conflicts and persistent issues affecting commodity costs.

The International Monetary Fund (IMF) cautioned that the predicted decelerations in the major emerging and developing economies might prolong the journey to bridge the income disparities between wealthy and impoverished nations. Prolonged economic growth at a sluggish pace may also worsen income disparity within these countries.

Inflation may still get worse, says billionaire

As a researcher delving into economic forecasts, I find myself at odds with the prevailing viewpoint of many economists predicting a deceleration of inflation in the ensuing months. Contrarily, acclaimed billionaire hedge fund manager Paul Tudor Jones anticipates an opposite trend.

On October 22nd, Jones expressed that he holds a long position in Bitcoin, gold, and various other commodities, driven by his escalating worry about the rising levels of debt the United States has amassed over recent years.

Looking ahead as a responsible crypto investor, I can’t help but feel a pang of concern upon learning that the Congressional Budget Office projects our federal government will face a staggering $1.9 trillion deficit in the fiscal year 2024. What’s more troubling is their forecast suggesting this figure could balloon to an alarming $2.8 trillion by 2034.

In simpler terms, Jones suggested that the solution lies in increasing inflation, just like Japan has begun doing.

“We’re going to be broke really quickly unless we get serious about dealing with our spending issues.”

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