IMF Boosts U.S. and Global Growth Forecasts, Warns of Inflation Risk

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By Trey Thoelcke Published
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The global economy will expand at 3.7% this year, the International Monetary Fund (IMF) forecast in its latest World Economic Outlook, released Tuesday. That is up from a 3.6% forecast back in October. The projection for global growth in 2015 is now at 3.9%.

U.S. gross domestic product (GDP) will see a gain of 2.8% this year, and that in the United Kingdom will increase by 2.4%. That is up from 2.6% and 1.9%, respectively, in the previous period. The IMF also raised its forecasts for growth in Germany and Spain, but lowered that of Italy and left France’s unchanged.

The forecast for Japan’s GDP growth rose from 1.2% in the previous period to 1.7% in the new outlook. China, the second-largest economy in the world, now is projected to grow 7.5%. While that is greater than the 7.3% estimate in the October outlook, it is down from 7.7 GDP growth last year.

Dangerously low inflation could put the global economic recovery at risk in 2014, according to the IMF. Low inflation may turn into deflation if the economy receives a shock. And that could result in a downward spiral of activity as consumers delay spending, expecting cheaper prices in the future.

The IMF report urged advanced economies to maintain monetary accommodation to bolster the global economic recovery.

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About the Author Trey Thoelcke →

Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.

Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community. He previously oversaw the 24/7 Climate Insights site, managing editorial operations and content strategy, and currently oversees and creates content for My Investing News.

Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.

Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, overseeing a long-running critique group and moderating workshop sessions at regional conventions. He lives with his family in an old house in the Midwest.

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