Tuesday, July 2, 2024
Year : 2, Issue: 28
The IMF held its global growth expectations for 2024 steady in a report Tuesday even as it cut forecasts for the United States and Japan, while warning of inflation risks and trade tensions ahead.
The International Monetary Fund expects the world economy to grow 3.2% this year, unchanged from its April forecast, according to its World Economic Outlook update.
“Global activity and world trade firmed up at the turn of the year, with trade spurred by strong exports from Asia, particularly in the technology sector,” said the fund.
For 2025, it expects global growth of 3.3%.
The Washington-based lender also cautioned that upside risks to inflation have increased, with services prices holding up disinflation.
While world growth appears stable, the IMF has lowered projections for the United States and Japan.
US growth in 2024 was downgraded to 2.6%, 0.1 percentage points below April’s forecast, due to a “slower-than-expected start to the year,” said the fund.
Japan’s economy was seen expanding 0.2 percentage points less than expected, by 0.7% this year.
The euro area meanwhile is showing signs of recovery, with relatively strong services activity, Gourinchas said, although manufacturing shows weakness.
China and India are expected to power activity in Asia — with China’s 2024 forecast revised up to 5.0% on a private consumption rebound and strong exports.
India, meanwhile, is set to grow 7.0%, partly on better prospects for consumption.
The IMF called for careful monetary policy adjustments.
A resurgence of tariffs can also trigger retaliation and a “costly race to the bottom,” said the report.
Another source of uncertainty is the chance of “significant swings in economic policy as a result of elections this year, with negative spillovers to the rest of the world.”
Source: AFP
