According to the Fund’s WEO report, there are increasing risks to global growth, which is predicted to trend to a dreary 3.1 percent by 2029.
The IMF said Tuesday that global growth would moderate to 3.2 percent this year and stay there in 2025, but cautioned that the steady numbers obscured “important” sectoral and regional changes.The International Monetary Fund also predicts in its latest World Economic Outlook (WEO) report that global inflation will continue to decline, reaching 5.8 percent this year before dropping to 4.3 percent in 2025.
International Monetary Fund managing director Kristalina Georgieva departs after delivering a curtain raiser speech on the outlook for the global economy and policy priorities ahead of the 2024 Annual Meetings of the IMF and the World Bank Group in Washington, DC, October 17, 2024. (Photo by Brendan Smialowski / AFP)
According to the Fund’s WEO report, there are increasing risks to global growth, which is predicted to trend to a dreary 3.1 percent by 2029.
“The picture is far from monolithic,” the Fund warned, pointing to “important sectoral and regional shifts” that have occurred over the last six months despite the comparatively optimistic outlook for growth through 2025.
In an interview with AFP prior to the report’s release, IMF chief economist Pierre-Olivier Gourinchas stated, “We are seeing inflation moving in the right direction without a major slowdown in economic growth or a global recession.””According to our baseline analysis, inflation in advanced economies will return to central bank targets in 2025,” he added, noting that emerging markets would require “a little bit more time.”According to the Fund’s WEO report, there are increasing risks to global growth, which is predicted to trend to a dreary 3.1 percent by 2029.
Attendees listen as International Monetary Fund managing director Kristalina Georgieva delivers a curtain raiser speech on the outlook for the global economy and policy priorities ahead of the 2024 Annual Meetings of the IMF and the World Bank Group in Washington, DC, October 17, 2024. (Photo by Brendan Smialowski / AFP)
The World Economic Organization’s report was released the day after the IMF and World Bank Annual Meetings began in Washington, which brought together central bankers and finance ministers from all over the world for discussions on the state of the world economy. robust U.S. growthAccording to the report, the US has continued to be a major contributor to global growth, which contrasts with the euro area’s continued sluggish growth.The largest economy in the world is now predicted to grow by 2.8 percent this year, which is marginally less than the 2.9 percent recorded in 2023 but still slightly better than the Fund’s July forecast.
The IMF predicted that while fiscal policy is “gradually tightened and a cooling labour market slows consumption,” it will then gradually ease to 2.2 percent in 2025, up 0.3 percentage points from July.Gourinchas stated, “The US economy has been doing very well,” citing robust productivity growth and the beneficial effects of a spike in immigration on economic expansion.
He went on to say that the US is “very close” to accomplishing a “soft landing,” which is a rare monetary policy achievement in which inflation drops to target levels without triggering a deep recession.Although it is still low by historical standards, growth in Europe is still on the rise and is expected to reach a pitiful 0.8 percent this year, with a slight increase to 1.2 percent in 2025.
The IMF lowered its forecasts for German growth by 0.2 percentage points this year and by half a percentage point next year, citing its “persistent weakness in manufacturing,” while France and Spain saw improvements in their outlook for 2024.Some positive news came from the UK, where growth is expected to pick up speed in 2024 and 2025 “as falling inflation and interest rates stimulate domestic demand.”India and China move slowlyAccording to the IMF, growth in Japan is predicted to drop precipitously to just 0.3 percent this year before picking up speed to 1.1 percent the following year, “boosted by private consumption as real wage growth strengthens.”The Fund anticipates that China’s economic output growth will continue to slow, reducing from 5.2 percent over the previous year to 4.8 percent this year before further declining to 4.5 percent in 2025.
International Monetary Fund managing director Kristalina Georgieva delivers a curtain raiser speech on the outlook for the global economy and policy priorities ahead of the 2024 Annual Meetings of the IMF and the World Bank Group in Washington, DC, October 17, 2024. (Photo by Brendan Smialowski / AFP)
The IMF noted “better-than-expected” net exports from the second-largest economy in the world and stated that “growth is projected to have slowed only marginally despite persisting weakness in the real estate sector and low consumer confidence.”With the IMF projecting growth of 7.0 percent this year, down from 8.2 percent in 2023, the slowdown in India appears to be more severe.According to the IMF, it will then slow even more to 6.5 percent as the “pent-up demand accumulated during the pandemic” runs out.
The IMF predicts that as the short-term impact of oil and shipping disruptions wanes, growth in the Middle East and Central Asia will pick up a little to 2.4 percent this year before soaring to 3.9 percent in 2025.Additionally, the IMF projects that growth in Sub-Saharan Africa will stay steady at 3.6 percent this year and increase to 4.2 percent in 2025 as supply constraints and weather shocks lessen.