IMF raises 2024 global forecast, India continues to shine
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Washington: The International Monetary Fund (IMF) has revised its 2024 global growth forecast to 3.1%, citing unexpected "resilience" in major advanced and emerging market economies worldwide.
The updated projection, revealed in the latest World Economic Outlook (WEO) report, is 0.2% points higher than the IMF's previous October estimate.
IMF Chief Economist Pierre-Olivier Gourinchas emphasised the global nature of this positive economic trend, pointing out resilience in various regions, including China, Russia, Brazil, and India. Gourinchas noted the simultaneous occurrence of lower inflation and increased growth.
While the upgraded forecast is a positive sign, global growth is anticipated to remain below its recent historical average of 3.8%, attributed to factors such as elevated interest rates, the withdrawal of pandemic-related government support, and persistently low productivity levels.
The IMF maintained an overall inflation outlook of 5.8% for 2024, but significant shifts were noted between richer and poorer nations.
In advanced economies, the forecasted inflation rate decreased to 2.6%, while emerging and developing economies are expected to experience an annual inflation rate of 8.1%.
The United States and China, the world's largest economies, witnessed notable upgrades to their growth outlooks for 2024. The IMF now anticipates the US economy to grow by 2.1% in 2024, slightly down from an estimated 2.5% in 2023. China's economy is expected to achieve 4.6% growth, reflecting the positive impact of fiscal support and less severe-than-anticipated challenges in the property sector.
India continues to be a bright spot in the global economy, with the IMF raising its growth projection to 6.5% for 2024, up 0.2% points from October. The Fund also revised growth prospects upwards for Russia, Iran, and Brazil.
While many Asian economies maintain robust growth, Europe presents challenges with "notably subdued growth in the euro area." Germany is expected to be the slowest-growing G7 economy, expanding by just 0.5% in 2024.
Despite some regional challenges, the overall global economic outlook for 2024 appears more optimistic, with positive growth projected for nearly all countries, except Argentina, which is expected to contract. This marks an improvement from 2023 when four out of the 30 economies cited in the report were estimated to have contracted according to the IMF.
