IMF upgrades economic outlook but points to ‘exceptional uncertainty’

The International Monetary Fund (IMF) released its latest world economic outlook update. Revised forecasts predict increased economic growth.
The post IMF upgrades economic outlook but points to ‘exceptional uncertainty’ appeared first on The Motley Fool Australia. –

international shares

The International Monetary Fund (IMF) released its latest world economic outlook update yesterday, forecasting stronger global economic growth than previously expected.

Based in Washington DC, the IMF is a financial institution that consists of 190 countries. Essentially, the IMF endeavours to oversee and steer global monetary policy while also addressing social problems like climate change and poverty.

As part of this work, the IMF releases its world economic outlook update twice a year. The report offers a detailed analysis of the global economy.

So what can we learn from the IMF’s latest report?

Things are looking up

The Australian Financial Review (AFR) points out that the revised January 2021 world economic forecast is up by 0.3 percentage points from the previous outlook.

The revised outlook stems from certain economies navigating through the coronavirus pandemic better than projected. The IMF stated that the increased outlook for 2021 reflected “additional policy support in a few large economies and expectations of a vaccine-powered strengthening of activity later in the year, which outweigh the drag on near-term momentum due to rising infections.”

According to the outlook, third quarter GDP was stronger than expected in a number of countries including Australia, India, Japan, Korea, New Zealand, Turkey and the United States.

The Australian notes today that IMF predicts the Australian economy will grow by 3.5% this year. This is 0.5% higher than October 2020’s forecast.

Uncertain world economic growth

The IMF advises that its latest economic projections come “amid exceptional uncertainty”, largely due to the coronavirus. 

Regarding the IMF’s world economic analysis, the report says that the key underlying uncertainties in the data models are COVID infection numbers and the efficacy of vaccine rollouts.

The outlook strongly advises that vaccines, therapies and containment efforts will have to progress smoothly to meet current growth targets.

However, as reported by the AFR, there’s always the chance that the coronavirus battle could move on more quickly and efficiently than expected, which might result in a global growth that’s stronger than forecasted.

Foolish takeaway

The IMF’s economic outlook is just one available resource to help form your own opinions about the state of the global economy.

Uncertainty and volatility are just as common in big-picture IMF forecasts as they are in the everyday trading markets. For now, it looks like economies around the world are showing signs of improvement. 

Let’s hope that this is a developing trend and we continue to see more of it.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of June 30th

More reading

Motley Fool contributor Gretchen Kennedy has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post IMF upgrades economic outlook but points to ‘exceptional uncertainty’ appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!