IMF revises global growth forecast upwards for 2024
Washington, US – The International Monetary Fund (IMF) on Tuesday revised its global economic growth forecast upwards for 2024, reflecting upgrades for some leading economies.
Global growth is projected to be 3.1% this year, 0.2 percentage points higher than its previous projections in October, while the estimate for 2025 has been kept unchanged at 3.2%.
This was driven by betterthan-expected resilience in the US and several large emerging markets and developing economies, as well as fiscal support from China, the IMF said in its January World Economic Outlook report.
In a blog post, IMF'S chief economist Pierre-olivier Gourinchas said, “The clouds are beginning to part. The global economy begins the final descent toward a soft landing, with inflation declining steadily and growth holding up. But the pace of expansion remains slow, and turbulence may lie ahead.”
The figures both for 2024 and 2025 are lower than the historical annual average of 3.8%, owing to tight monetary policies, the withdrawal of fiscal support, and low productivity growth, the report added.
Pointing to the faster-than-expected decline in inflation, amid easing supply disruptions and restrictive monetary policy, the IMF foresees that global headline inflation will drop to 5.8% in 2024 and 4.4% in 2025.
The US economy is expected to grow 2.1% this year, an upward revision of 0.6 percentage points reflecting statistical carryover effects from last year’s stronger-than-expected growth outcome. The US economy's growth forecast for 2025 has been lowered to 1.7% from 1.8%.
The IMF hiked its growth projection for China by 0.4 percentage points to 4.6% in 2024, thanks to stronger-than-expected growth in 2023 and increased government spending on capacity building against natural disasters, it said.
The world's second-largest economy is projected to grow by 4.1% in 2025, unchanged from the October forecast.
The euro area's GDP is expected to increase by 0.9% in 2024 and 1.7% in 2025, downgraded by 0.3 percentage points and 0.1 percentage points, respectively.
The Turkish economy's growth forecast was raised to 3.1% for 2024, up from the previous estimate of 3% in October, while it was kept stable at 3.2% for 2025.
Boosted by resilient domestic demand, the Indian economy is estimated to grow by 6.5% in both 2024 and 2025, with an upgrade from October of 0.2 percentage points for both years.
“Global activity proved resilient in the second half of last year, as demand and supply factors supported major economies. On the demand side, stronger private and government spending sustained activity, despite tight monetary conditions. On the supply side, increased labour force participation, mended supply chains and cheaper energy and commodity prices helped, despite renewed geopolitical uncertainties,” Gourinchas said.
“This resilience will carry over. Global growth under our baseline forecast will steady at 3.1% this year, a 0.2 percentage point upgrade from our October projections, before edging up to 3.2% next year,” he added.
Clouds are beginning to part. Global economy begins the final descent toward a soft landing, with inflation declining steadily and growth holding up PIERRE-OLIVIER GOURINCHAS