2024-04-17 09:12:09
The International Monetary Fund (IMF) revised upward its expectations for the growth of the world economy. That’s according to the IMF’s latest spring report on the outlook for the global economy, titled “Stable but Slow Growth: Resilience amid Divergence.”
According to the latest estimate of the Washington institution, global economic growth this year will be 3.2 percent, the same as in 2023. In its January interim forecast, the IMF indicated that the indicator for this year will grow by 0.1 percentage points less, or by 3.1 percent.
Global average headline inflation will slow from 2.8 percent at the end of 2024 to 2.4 percent at the end of 2025. The IMF’s new assessment shows that price increases will be higher this year (+0.1 percentage points) than the forecasts in January.
“The global economy remains remarkably resilient, with growth holding steady while inflation returns to target levels. In recent years, the global economy has been going through a number of challenges, starting with supply chain disruptions as a result of the pandemic, Russia’s war against Ukraine, which triggered a global energy and food crisis, alongside a significant spike in inflation, followed by a globally synchronized tightening of monetary policy,” said a summary of the report signed by IMF head of research Pierre-Olivier Gurinchus.
Yet, despite many gloomy predictions, the world avoided recession, the banking system proved largely resilient, and major emerging market economies did not experience sudden shocks. Moreover, the surge in inflation – despite its severity and the associated cost-of-living crisis – did not trigger uncontrolled spirals from wage costs, the foreword to the IMF’s spring forecasts also stated.
The changes
In terms of advanced economies, the IMF downgraded its forecast for this year for the euro area (+1.4 percent, down 0.1 percentage points from the January estimate) and Canada (+1.8 percent, down 0. 1 percentage point below the January estimate). However, the fund already expects greater growth in the US (+2.1 percent, or 0.6 percentage points above the previous forecast) and Great Britain (+1.5 percent, or 0.9 percentage points above the January forecast) .
The main reason for the downward assessment of the euro area economy is a worsening of the situation in Germany, France and Italy, for which economic estimates have been lowered by 0.4 percentage points, 0.3 percentage points and 0.6 percentage points respectively to growth of 0 .7 percent, 1.1 percent, and 0.7 percent.
According to IMF estimates, the US economy is already surpassing its pre-pandemic growth rate.
In the Eurozone, economic growth remains subdued as tighter monetary policy and energy costs, as well as planned fiscal consolidation, put pressure on activity. Continued high wage growth and persistent inflation in services may slow the return of inflation to the target level.
For China in 2024, the forecast remains unchanged – for GDP growth of 4.4 percent, but for India it has been lowered by as many as 1.4 percentage points to 6.4 percent, writes BTA.
According to the IMF’s spring forecasts, Russia’s economy will grow by 3.2 percent in 2024 and 1.8 percent in 2025, a significant increase from January estimates for both years.