In its quarterly World Economic Outlook, the International Monetary Fund (IMF) said on Tuesday that most countries will avoid a recession in 2023, but nonetheless forecast some of the slowest global growth in decades.

While downgrading its outlook for the global economy, the Fund now forecasts global growth of 2.8 per cent this year, down from 3.4 per cent in 2022 and from the 2.9 per cent estimate for 2023 it made in its previous outlook in January.

“The massive and synchronised tightening of monetary policy by most central banks is starting to bring inflation back towards its targets. At the same time, serious financial stability-related downside risks have emerged in our latest forecast,” the IMF’s chief economist Pierre-Olivier Gourinchas said.

Meanwhile, in the US, a key measure of inflation remained elevated in March but showed hints of cooling, giving the Federal Reserve room to pause interest rate hikes following the anticipated increase next month.

The much-anticipated Consumer Price Index (CPI) report by the US Labour Department showed that prices rose by 0.1 per cent in March, less than the 0.2 per cent increase expected by economists after February’s 0.4 per cent gain.

On an annual basis, the index was up by five per cent, down from 5.5 per cent the month before and below estimates in the smallest 12-month gain since May 2021.

Excluding volatile food and energy prices, the so-called core CPI notched up 0.4 per cent in March and was up by 5.6 per cent from a year earlier, accelerating slightly from 5.5 per cent in February as housing costs rose.

The report could convince the Fed to halt its rate-hiking regime, even though CPI was still up by five per cent year over year.

Finally, sentiment among investors in the countries that share the euro currency improved in April after an unexpected dip in March, continuing the positive trend of the recent months, a survey among 1,300 investors showed on Tuesday.

Investors’ assessment of current conditions rose to the highest level in more than a year, rising to -4.3 in April, from -9.3 previously. The fact that it remains in negative territory continues to paint a picture that the economy is still largely stagnating.

However, there is no doubt that the eurozone economy has weathered the winter months better than many feared in last autumn. The mild winter and efforts to conserve energy helped prevent a dangerous energy crisis.

This article does not constitute legal and/or financial advice and is being issued for information purposes only by Bank of Valletta plc, 58, Zachary Street, Valletta. Bank of Valletta is a public limited company regulated by the MFSA and is licensed to carry out the business of banking and investment services in terms of the Banking Act (Cap. 371 of the Laws of Malta) and the Investment Services Act (Cap. 370 of the Laws of Malta).