IMF: Soft Landing Likely for Europe



Wed Nov 11, 2023

Bloomberg reporting – The International Monetary Fund (IMF) forecasts that Europe’s economy will likely avoid a recession despite ongoing interest rate increases aimed at controlling inflation. However, returning inflation to normal levels may take several years. The IMF notes rising wages in Europe, which support economic recovery but also risk further inflation if not accompanied by productivity improvements. In Poland, post-election, the central bank is concerned about inflation, raising questions about the influence of politics on monetary policy.


  • China: Struggling to attract foreign investments, with more investments leaving the country than entering. This is the first time since 1998 that foreign direct investment has contracted, suggesting a shift in global supply chain strategies.
  • Hong Kong: The city downgraded its growth forecast for this year, facing challenges despite a boost from tourism revival.
  • Indonesia: Facing its slowest growth in two years, the government plans to increase social assistance disbursements. The country experienced a decline in exports, impacting its economic recovery.

United States

  • Inflation expectations continue to rise, with consumers anticipating higher gas prices, despite a recent decrease in pump prices. This reflects broader concerns about high borrowing costs and economic prospects.
  • The use of credit cards increased in the third quarter, with Millennials and those with student or auto loans struggling more with payments.
  • The Census Bureau reports that inflation is still causing significant financial stress, particularly in southern states.

Emerging Markets

  • Brazil: Retail sales increased more than expected, with policymakers committing to maintain interest rate cuts.
  • Saudi Arabia: Aiming to diversify its economy, it plans to become a key hub for electric vehicle battery production and develop a domestic auto industry.

Global Developments

  • Australia: Resumed raising interest rates, indicating a higher bar for further tightening.
  • Poland and Mexico: Halted easing cycles or kept rates high, respectively.
  • Peru: Continued cutting interest rates.
  • China: Is overhauling its lending strategy to developing nations, moving away from large bilateral deals under its Belt and Road Initiative.

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