The IMF has released its update on the World Economic Outlook for July 2024.
WASHINGTON DC, July 16, 2024 — According to the IMF, global growth is expected to match the forecast from April 2024, at 3.2 percent in 2024 and 3.3 percent in 2025. However, different momentum in economic activity at the start of the year has lessened the variation in financial performance across countries as temporary factors fade and economic activity aligns better with its potential.
“Economic activity has been strong in early 2024, driven by strong private spending in major economies. Despite ongoing service price increases and trade tensions, the global economy is expected to grow at 3.2% in 2024 and 3.3% in 2025, which is in line with the IMF’s April forecast. However, the pace of global price decreases is slowing due to ongoing services price increases,” stated Jean-Marc Natal, Deputy Chief of the World Economic Studies Division in the Research Department of the IMF.
Mr. Natal elaborated, “Overall, the outlook remains balanced, with short-term challenges taking on greater significance. Increased inflation risks are linked to ongoing struggles in reducing service prices, as well as escalating trade tensions and geopolitical uncertainties. These factors could lead to prolonged periods of higher interest rates, heightening external, fiscal, and financial risks. However, proactive policies promoting multilateralism and swift implementation of structural reforms have the potential to fuel supply gains, boost productivity, and drive global growth.”
“Policymakers need to act now to boost long-term growth. Central banks should be cautious about easing policies too early and open to further tightening if needed. Fiscal policy should focus on rebuilding buffers, ensuring debt sustainability, and making room for priority investments. Enhancing multilateral cooperation and reducing trade-distorting measures is crucial,” Mr. Natal explained.
The IMF has raised its projections for India, stating that the country is now expected to grow by seven percent in 2024. This is an increase from the 6.8 percent projection made in April. The IMF explained that the upward revision is due to carryover from upward revisions to growth in 2023 and improved prospects for private consumption, especially in rural areas.
Source: IMF
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