Is the global economy stumbling into ‘the tepid Twenties’?

AFTER a spell of soaring prices and steep interest rates, European Central Bank (ECB) president Christine Lagarde allowed herself a moment of optimism last week.

“We are clearly seeing signs of recovery,” she said on Wednesday (Apr 17). A “phenomenal” job market would be matched by a rebound that, although “timid” at first, would pick up speed over the course of 2024, she added.

Her relieved tone – reflected elsewhere in a sunny Washington during the International Monetary Fund (IMF) and World Bank’s spring meetings – was understandable. A buoyant US economy, soaring domestic demand in India and waning price pressures elsewhere have reduced the chances of a much-feared global recession to near zero. The IMF now foresees the world economy growing by 3.2 per cent this year, up from the 2.9 per cent projected six months ago.