On Tuesday, the International Monetary Fund (IMF) raised its global growth forecast as the United States has rebounded to exceed its pre-pandemic growth levels, and India’s growth prospects also look promising.
It now expects global growth of 3.2% in 2024, up by a modest 0.1 percentage point it released in its World Economic Outlook(WEO) report. Growth is then expected to expand at the same pace of 3.2% in 2025.
The IMF said the economy had proven “surprisingly resilient” despite inflationary pressures and monetary policy shifts.
Pierre-Olivier Gourinchas, chief economist of the IMF and director of the Research Department, in his blog post, stated that “Despite gloomy predictions, the global economy remains remarkably resilient, with steady growth and inflation slowing almost as quickly as it rose.” He further added that “the findings suggest that the global economy is heading for a “soft landing,” following a string of economic crises, and that the risks to the outlook were now broadly balanced.”
The IMF also said that there is only a 10% chance of a global recession, which is defined as global growth falling below 2%.
China’s growth rate
The report further projected China’s economic growth to decline this year and has flagged that much of Europe will have a rather gradual economic recovery compared to that of the United States. China, whose economy remains weakened by a downturn in its property market, was cited among a series of potential downside risks facing the global economy.
Central banks are now being closely watched for a signal on the future path of inflation, with opinion diverging on either side of the Atlantic as to when the Federal Reserve and the European Central Bank will cut rates.
Despite the rosier outlook of Tuesday, global growth remains low by historic standards, IMF’s five-year forecast sees global growth at 3.1%, its lowest level in decades.
The International Monetary Fund (IMF) works to achieve sustainable growth and prosperity for all of its 190 member countries.
