Headline: "IMF Revises Growth Forecasts for Major Economies"
The International Monetary Fund (IMF) has highlighted a mixed outlook for the global economy in 2024, revising economic growth forecasts for several major economies. Growth projections for the United States, Brazil, and the United Kingdom have improved, while forecasts for China, Japan, and the Eurozone have been downgraded.
The IMF expects the U.S. economy to grow by 2.8% in 2024, slightly up from previous estimates, driven by stronger consumer spending supported by rising wages and asset prices. The 2025 forecast for the U.S. was also increased to 2.2%. Brazil’s 2024 growth projection was significantly raised to 3.0% due to robust private consumption and investment.
Conversely, China’s growth rate for 2024 was lowered to 4.8%, with challenges in the real estate sector and declining consumer confidence negatively impacting the outlook. The Eurozone’s 2024 forecast was slightly reduced to 0.8%, with Germany’s growth expected to stagnate due to struggles in the manufacturing sector. Japan’s growth projection for 2024 was cut to 0.3%, reflecting ongoing supply chain disruptions.
In contrast, India maintains its position as the fastest-growing major economy, with stable growth rates of 7.0% in 2024 and 6.5% in 2025. The UK’s 2024 projection was raised to 1.1%, with the IMF noting that declining inflation and low interest rates are key factors supporting consumer demand.
Pierre-Olivier Gourinchas, the IMF’s chief economist, highlighted the resilience of the U.S., India, and Brazil, pointing to a “soft landing” where inflation eases without significant job losses. However, Gourinchas expressed concerns that if central banks do not adjust interest rates in response to falling inflation, overly tight monetary policy might hinder growth and employment.
In setting the stage for the upcoming IMF and World Bank annual meetings in Washington, the global lender’s report forecasts that global GDP growth will remain unchanged at 3.2% for 2024 and slightly decline to 3.2% in 2025. Over a five-year horizon, the IMF expects global growth to slow to 3.1%, below the pre-pandemic trend.
The IMF warned of various risks to the economic outlook, including armed conflicts, new trade wars, and the ongoing effects of tight monetary policy. It also cautioned against protectionist industrial policies, advocating instead for domestic reforms that promote technology, innovation, and competition to support sustainable growth.
Trade tensions remain a concern; the IMF outlined a hypothetical scenario where the imposition of significant tariffs among major economies could reduce global GDP by 0.8% in 2025 and 1.3% in 2026.
The report did not specifically mention tariffs proposed by U.S. Republican presidential candidate Donald Trump but modeled the impact of broad tariff increases and reduced migration on the global economy. Additional risks include the potential rise in oil and commodity prices due to conflicts in the Middle East and Ukraine.