In the latest update to the IMF’s World Economic Outlook (WEO), forecasts for world economic growth in 2018 and 2019 were revised upward. However, IMF warned of uncertainties ahead, citing stronger growth could provide the seeds of a possible reversal if it triggers faster than expected inflation in advanced economies, and a quicker increase in interest rates. Complacency could prompt financial market players to look for riskier and more lucrative investments.
The IMF’s chief economist, Maurice Obstfeld, added that factors creating the current global upswing were unlikely to last for long. “The next recession may be closer than we think,” he told reporters in Davos.