The U.S. economy comes out on top, IMF forecasts

The US economy is expected to continue its robust growth, defying predictions of a recession, according to the International Monetary Fund's new forecasts. The IMF projects the US will grow 2.8% this year, the fastest growth among the G7 major economies, and 2.2% in 2025. This is an upgrade from the IMF's July forecast, which had predicted a US slowdown to 1.5% growth in 2024. The US outperformance is attributed to strong productivity growth and a rise in immigration, which has integrated foreign-born workers into the labor force. The IMF chief economist, Pierre-Olivier Gourinchas, notes that the labor market remains robust, and the risks of a recession in the US are diminished. The US upgrade was a key reason the IMF's projection for global growth held steady at 3.1%, making up for slower growth expectations in other advanced economies. Consumer spending and business investment in the US have been stronger than expected, forcing economists to push up growth forecasts. The global battle against inflation has largely been won, with worldwide inflation expected to fall to 3.5% by the end of next year. However, the IMF warns that industrial policies and tariffs can lead to retaliation and fail to deliver sustained improvements in standards of living. The IMF's forecast suggests that central banks can loosen their grip on major economies, providing much-needed macroeconomic breathing room.