The International Monetary Fund (IMF) has revised its economic forecast, upgrading growth prospects for China, India, and Europe, while slightly downgrading expectations for the United States and Japan.
Despite this, global growth remained steady at 3.2%, unchanged from its previous forecast in April.”Global growth remains steady,” said Pierre-Olivier Gourinchas, the IMF’s chief economist.
However, he noted that the world economy’s expansion remains unimpressive by recent historical standards, averaging 3.8% annual growth from 2000 to 2019.
“China and India are expected to drive nearly half of global growth in 2024, with China’s exports and India’s consumer spending fueling their respective economies.
“Europe’s services sector is also showing signs of recovery, following a challenging period marked by high energy prices and economic disruption from Russia’s invasion of Ukraine,”he said.
However, the IMF noted that progress in combating inflation has been slower than anticipated, particularly in the services sector.
“The good news is that as headline shocks receded, inflation came down without a recession,” Gourinchas wrote in a blog post. “The bad news is that it still isn’t back to pre-pandemic levels.”
The fund warned that some central banks may keep interest rates higher for longer, potentially weakening global growth.
Despite this, the IMF expects worldwide inflation to continue easing, from 6.7% in 2023 to 5.9% this year and 4.4% in 2025.
Overall, the report highlighted the ongoing complexities in the global economy, with both positive and negative trends influencing growth prospects.
“China and India would account for nearly half of global growth this year… but China’s growth would slow to 3.3% by 2029, facing significant challenges from a collapsing housing market and aging population,”Gourinchas noted.
Boluwatife Enome
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