According to IMF, a rebound in travel will help the world economy.

The International Monetary Fund (IMF) raised its 3% prediction for this year's growth of the world economy.

The rise in post-pandemic travel was a contributing factor in the 0.2% improvement from the projection for April.

The anticipated improvement also took into account a robust employment market and the services industry.

However, the IMF warned that threats in rich countries still included rising interest rates and skyrocketing consumer costs.

One of the biggest threats to the future was China's fragile economic recovery.

According to Pierre-Olivier Gourinchas, chief economist at the IMF, the pandemic's recovery is still having an effect.

According to him, demand for services, going out, travel, and tourism showed "strong resilience" in the first three months of 2023.

According to the most recent data from the International Aviation Transport Association, worldwide aviation traffic continued to improve in May and reached 96.1% of pre-covid levels.

The southern European economies in Europe that are heavily dependent on tourism, some of which have been severely affected by wildfires, have little potential for further recovery, according to the IMF.

This year, mature economies like those in Europe and the United States are expected to develop more slowly than so-called emerging economies like China and India.

With the IMF reaffirming May's assumption of growth of 0.4% rather than a decrease of 0.3%, the UK has had one of the largest upgrades in growth since the latest predictions in April.

Nonetheless, with a 0.3% decrease predicted, this still puts UK growth as the second-slowest in the G7 group of major countries, trailing only Germany.

The biggest economy in the Eurozone is already in recession as a result of consumers' reduced spending as a result of rising costs.

The 2% inflation objectives set by the US Federal Reserve, Bank of England, and European Central Bank are all still some distance away from being met.

To make borrowing more expensive and to slow the economy, banks have been hiking interest rates. Interest rates are now at their highest level since before the global financial crisis of 2008.

Both the US Fed and the ECB are generally anticipated to raise borrowing costs once again this week.

(Sources: bbc.co.uk)