IMF Forecasts 3.1% Global Economic Growth in 2024 Amidst Challenges

by Roman Cheplyk
Wednesday, January 31, 2024
IMF Forecasts 3.1% Global Economic Growth in 2024 Amidst Challenges

The International Monetary Fund (IMF) has revised its global economic growth forecast, indicating a modest improvement for 2024 but cautioning that significant challenges lie ahead

The latest World Economic Outlook Update predicts a 3.1% growth rate in 2024, a slight increase from previous projections, and a further 3.2% expansion in 2025.

This updated forecast, which is 0.2% higher than the October 2023 projection, reflects unexpected economic resilience in the United States and key emerging markets, alongside fiscal stimuli in China. However, it still falls short of the historical average growth rate of 3.8% for the 2024-2025 period. The IMF attributes this to tighter monetary policies implemented by central banks to combat inflation, as well as the scaling back of fiscal support amid rising national debts.

Core global inflation is projected to decrease to 5.8% in 2024 and further to 4.4% in 2025. The IMF warns that new surges in commodity prices, potentially triggered by geopolitical tensions or supply chain disruptions, could maintain pressure on monetary conditions.

The IMF emphasizes the importance of targeted structural reforms to boost productivity and debt sustainability, thereby facilitating economic recovery and advancement towards higher income levels. Moreover, the report highlights the need for effective multilateral coordination, particularly in debt resolution, to create room for essential investments.

This outlook comes amid the IMF's broader analysis of the Ukrainian economy, which is also expected to show gradual recovery in 2024.

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