Posted on 18 Apr 2024
The International Monetary Fund (IMF) has revised its forecast for global economic growth for 2024 higher by a modest 0.1 percentage point from its earlier forecast issued in January to reach 3.2%, the same rate as in 2023, according to IMF's latest April World Economic Outlook (WEO). Despite growth being patchy, the global economy is still strong, it explained, but warned that challenges ahead.
The IMF's estimated growth for 2025 remains unchanged at 3.2%, however, according to the latest WEO released on April 16.
Nevertheless, the forecast for global growth in 2024 and 2025 is still below the historical annual average of 3.8% over 2000-2019, reflecting restrictive monetary policies and the withdrawal of fiscal support, as well as low underlying productivity growth, the IMF noted.
Compared with the WEO issued in January, the IMF has made some adjustments for major economies in its latest forecast, notably a further strengthening of its projection for growth in the United States.
US growth this year is forecast at 2.7% but will likely slow to 1.9% in 2025, as gradual fiscal tightening and a softening in labor markets will slow aggregate demand, it said.
Risks to the global outlook are balanced but are more tilted to the downside in the near-term, the Fund noted. On the downside, new price spikes from geopolitical tensions, persistent core inflation, or a "disruptive turn" towards a fiscal adjustment could slow activity.
On the upside, faster disinflation or timely structural reforms that boost productivity could support activity. "Insufficient action on the fiscal front could also stimulate growth, although this could force a costlier adjustment later on," according to the new WEO.
"The global economy continues to display remarkable resilience, with growth holding steady and inflation declining, but many challenges still lie ahead," said Pierre-Olivier Gourinchas, chief economist of the IMF.
Growth forecast by selected economies/countries (%)
Economies/Countries | 2023 | 2024E | 2025E | Difference from Jan '24 Projections | |
2024E | 2025E | ||||
World Output | 3.2 | 3.2 | 3.2 | 0.1 | - |
Advanced Economies | 1.6 | 1.7 | 1.8 | 0.2 | - |
United States | 2.5 | 2.7 | 1.9 | 0.6 | 0.2 |
Euro Area | 0.4 | 0.8 | 1.5 | -0.1 | -0.2 |
Japan | 1.9 | 0.9 | 1.0 | - | 0.2 |
Emerging Market | 4.3 | 4.2 | 4.2 | 0.1 | - |
China | 5.2 | 4.6 | 4.1 | - | - |
India | 7.8 | 6.8 | 6.5 | 0.3 | - |
Russia | 3.6 | 3.2 | 1.8 | 0.6 | 0.7 |
Source: IMF; (E): Estimated
Note: For India, data and forecasts are presented on a fiscal year basis, and GDP from 2011 onward is based on GDP at market prices with fiscal year 2011/2012 as a base year.
Source:Mysteel Global
