Mubasher: The global economy is maintaining momentum on the back of steady growth in advanced economies despite prevailing uncertainty, Al Rajhi Capital said in a report issued on Wednsday.
The global manufacturing and confidence indicators have moved higher across the globe, while inflation has picked up, partly owing to higher prices of oil and some other commodities.
The US Federal Reserve has raised interest rates by 25 basis points, in line with market expectations, and has maintained its projection for three rate hikes this year, citing improving employment, inflation, and consumer and business confidence.
Capital markets globally reacted positively to the rate hike and Fed’s outlook, the report indicated.
Meanwhile, the International Monetary Fund (IMF) is looking to raise the UK’s growth forecast in its April world economic outlook report.
The agency also stated that the emerging economies will continue to constitute a majority of global growth, led by India and China, backed by improving conditions in countries such as Russia and Brazil, who have wriggled out of deep recession.
However, there are concerns over whether this momentum can be sustained. Inflation may ease over the coming months as oil prices have begun to fall back on increased shale supply, while wage growth slowed.
The IMF chief has mentioned that there is a need for continued monetary support and a focus on the fiscal policy to maintain this momentum, the report concluded.
