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IMF Raises Global Growth Forecast Amid ‘Surprisingly Resilient’ Economy
April 22, 2024
The International Monetary Fund (IMF) has raised its outlook for the global economy for the rest of the year, citing data that shows a global economy that has been “surprisingly resilient” in the face of inflationary pressures and shifting monetary policy.
The IMF now expects global growth of 3.2% in 2024, up 0.1 percentage point from projections made in January, and in line with projections made last year. The IMF also expects 3.2% growth in 2025.
The IMF’s chief economist said that recent data suggests that the global economy is on track for a “soft landing,” meaning that inflation will return to normal levels without requiring a recession.
The report attributed the “resiliency” of the global economy to the stronger-than-expected recovery of the U.S. economy, which, along with many developing economies, has exceeded pre-pandemic growth trends. The IMF also notes the rapid progress in fighting inflation in Europe, which despite a recent plateau, has seen inflationary pressures abate faster than expected.
Of the potential downside risks facing the global economy, the IMF seems to see the continued struggles of China as a key threat. Dim prospects for the world’s second-largest economy could weigh on global trade. Also included in the report’s downside risk were rebounding inflationary pressures prompted by geopolitical conflicts, trade tensions, and diverging paths among major economies’ fight against inflation.
The IMF sees global inflation falling from an annual average of 6.8% in 2023 to 5.9% in 2024 and 4.5% in 2025, with advanced economies returning to their inflation targets sooner than emerging market economies.
Despite the more optimistic outlook, global growth remains low by historic standards. The IMF’s long-term forecast shows growth of 3.1% over the next five years, the lowest level in decades.
