Key Points

  • The IMF outlook highlights the remarkable resilience in growth and declining inflation in most countries. However, the medium-term outlook remains subdued when compared to the pre-pandemic growth average.
     
  • Although inflation is softening, its reduction remains a priority and central banks need to calibrate monetary policy at a country level.
     
  • The tremendous optimism in financial markets based on the soft-landing narrative presents challenges: inflation persistence, compressed volatility and high correlation across assets with elevated fundamental uncertainty.

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