IMF lifts growth forecast
Washington – The International Monetary Fund (IMF) announced yesterday it has raised its 2024 global growth forecast to 3.1%, citing unexpected “resilience” in major advanced and emerging market economies around the world.
The updated figure, released in the latest World Economic Outlook report, is 0.2 percentage points higher than the IMF’s previous forecast in October.
“We had simultaneously less inflation and more growth,” said IMF chief economist Pierre-Olivier Gourinchas.
“It’s not just a US story. There was a lot of resilience in many, many parts of the world in the past year and going into 2024,” he said, highlighting countries including China, Russia, Brazil and India.
Despite the upgrade, global growth is predicted to remain below its recent historical average of 3.8% this year and next due to continued impacts of elevated interest rates, the withdrawal of pandemic-related government support, and persistently low levels of productivity.
Among the Group of Seven advanced economies, growth in European countries looks set to remain weak, reflecting ongoing challenges, while Japan and Canada are expected to fare slightly better.
The IMF’s overall inflation outlook remained unchanged at 5.8% for 2024, but that masks a significant underlying shift between richer and poorer countries.
Inflation in advanced economies is now forecast to be 2.6% in 2024, down 0.4 percentage points from October, while emerging and developing economies are expected to hit an annual inflation rate of 8.1%, up 0.3 percentage points.
Much of the increase can be attributed to ongoing trouble in Argentina, where consumer price increases exceeded 200% last year amid an ongoing economic crisis.
The United States and China, the world’s two largest economies, both saw significant upgrades to their growth outlook for 2024, putting them on track for a less substantial slowdown than the IMF previously anticipated.
The IMF now expects the US economy to grow by 2.1% in 2024, down slightly from an estimated 2.5% in 2023.