IMF upgrades 2024 global growth forecast to 3.2 pct-Xinhua

IMF upgrades 2024 global growth forecast to 3.2 pct

Source: Xinhua

Editor: huaxia

2024-04-16 23:24:45

WASHINGTON, April 16 (Xinhua) -- The International Monetary Fund (IMF) on Tuesday upgraded its forecast of global growth in 2024 to 3.2 percent, 0.1 percentage points higher than its projection in January, according to its newly released World Economic Outlook (WEO) report.

Despite gloomy predictions, the global economy remains remarkably resilient, with steady growth and inflation slowing almost as quickly as it rose, Pierre-Olivier Gourinchas, chief economist of the IMF and director of the Research Department, told a press briefing during the 2024 Spring Meetings of the IMF and the World Bank. "Most indicators continue to point to a soft landing."

Despite less economic scarring from the crises of the past four years, the IMF estimates that there will be more scarring for low-income developing countries, many of which are still struggling to turn the page from the pandemic and cost-of-living crises, he said.

Despite these welcome developments, Gourinchas noted that numerous challenges remain, and decisive actions are needed.

The WEO report showed that the latest forecast for global growth five years from now -- at 3.1 percent -- is at its lowest in decades.

The IMF estimates that global headline inflation is expected to fall from an annual average of 6.8 percent in 2023 to 5.9 percent in 2024 and 4.5 percent in 2025, with advanced economies returning to their inflation targets sooner than emerging market and developing economies.

The IMF chief economist pointed out that oil prices have been rising recently in part due to geopolitical tensions and services inflation remains stubbornly high.

The report pointed out several downside risks: new price spikes stemming from geopolitical tensions, including those from the Ukraine crisis and the Gaza-Israel conflict, could, along with persistent core inflation where labor markets are still tight, raise interest rate expectations and reduce asset prices.

A divergence in disinflation speeds among major economies could also cause currency movements that put financial sectors under pressure, the report said.

High interest rates could have greater cooling effects than envisaged as fixed-rate mortgages reset and households contend with high debt, causing financial stress, it added.