Economy

IMF: Global Economy Beginning To 'Turn The Corner'

The global economy could be headed for a brighter future than was thought just a few months ago, according to an official with the International Monetary Fund (IMF), with better economic data from China than was expected and other economies improving, too.

Reuters reported that IMF spokesperson Gerry Rice wasn't all optimistic, though, as he warned that some developing countries' economies are still in "precarious" situations, and rising debt levels could pose problems going forward.

Rice said global trade seemed to be inching toward recovery, and parts of the global economy are "beginning to turn the corner," Reuters reported, but he emphasized that "we are not out of the woods." Many other countries aside from China, he said, faced issues such as weak domestic demand, lower export demand, diminishing resources and declining tourism.

“Taken together, we are very concerned that this crisis will reverse the gains in poverty reduction that have been made in recent years, and roll back progress that has been made toward the Sustainable Development Goals,” he said, according to Reuters.

The Sustainable Development Goals were put in place five years ago by the United Nations to end poverty and inequality.

The IMF is set to release its latest World Economic Outlook on Oct. 13. In June, the IMF cut its 2020 global outlook forecasts further than they had been earlier in the pandemic, with forecasts that the global economy would contract 4.9 percent compared to the 3 percent decline predicted in April, Reuters reported.

The IMF took a grave tone in April as it said COVID-19 could form "cracks" in the global financial system. One point of pressure, the group said, was the U.S. commercial real estate space, in which tenants were struggling to pay rent, which was putting a crunch on some financial institutions.

The IMF predicted in May that many advanced economies might not be able to bring in profits higher than their cost of equity by 2025, citing a simulation exercise. Large European nations in particular would have to make changes to cost and non-interest income.

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