Economic forecasting is getting harder and uncertain
We must stay alert and nimble as widely varying expectations point to how little can be said confidently
About a fortnight ago, the IMF’s chief economist gave a remarkably upbeat assessment of the global economy. Pierre-Olivier Gourinchas said the global economy had displayed a great deal of “resilience": “Labour markets are tight, household and business investment remain strong… barring new shocks, 2023 could be the year of turning points, with growth bottoming out and inflation decreasing." Just weeks earlier, however, the head of IMF, Kristalina Georgieva, had characterized a third of the global economy as heading for recession and warned that even in countries that would escape one, for hundreds of millions, “it would feel like a recession.This week, Georgieva was at it again, warning we must accept that we live in a “more shock-prone world.