The U.S. economy is on a gloomy spot as inflation is yet to be brought under 2% and the cost of living has skyrocketed. The housing markets and rent have shot up by nearly 50% while wages are yet to catch up. The U.S. dollar outperformed gold, oil, commodities, and local currencies this month, but the development failed to ease the living of the average American. While several economists point toward a recession, a recent report from the International Monetary Fund (IMF) has forecasted hope for the U.S. economy’s prospects.
IMF Predicts the U.S. Economy Will Grow
The IMF now predicts that the U.S. economy will grow by 2.1% this year in 2023. The prediction is stark opposite to what other leading financial analysts forecasted that a recession is on the cards. The IMF also predicted that the U.S. economy will grow by another 1.5% in 2024. The global bank projected the improvements in business investments in the second quarter connecting the worker shortages that continue to drive healthy wages.
The bank highlighted the improvements in infrastructure, green energy, and semiconductor projects that are helping the U.S. economy to climb up. In addition, global financial institutions are now investing in the U.S. dollar after the Israel and Palestine conflict. The U.S. dollar is seen as a safe haven due to the global turmoil as it offers safety and stability.
Read here to know how the conflict between Israel and Palestine is boosting the U.S. dollar this week. The dollar’s upward trajectory helps the U.S. economy as businesses boom and help wages move forward. The U.S. dollar is now nearing 106 points and is at a 1-month high. The USD is behind by only 8 points to reclaim its yearly high of 114.
In conclusion, the IMF has painted a positive picture for the U.S. economy for both 2023 and 2024. Nonetheless, the global markets are subjective and could be brought down unexpectedly through wars, among other factors.