The International Monetary Fund (IMF) has revised its global growth projection for 2024, increasing it by 0.2 percentage points to 3.1%. This upward revision is attributed to the resilience of the U.S. economy and the proactive fiscal measures taken by China to bolster economic stability. The U.S. economy has exhibited unexpected strength, contributing significantly to the improved global growth forecast. Additionally, large emerging market economies such as Brazil, India, and Russia have outperformed previous expectations, further enhancing the global economic landscape.
Despite concerns over Middle East volatility affecting commodities and supply chains, the IMF believes there is now a reduced likelihood of a “hard landing,” which refers to an economic contraction following a period of robust growth. These new risks are counterbalanced by positive economic trends. The IMF predicts growth rates for various regions in 2024, including 2.1% in the U.S., 0.9% in both the euro zone and Japan, and 0.6% in the United Kingdom.
IMF’s chief economist, Pierre-Olivier Gourinchas, emphasizes the global economy’s resilience, driven by strong demand, government spending, and supply chain improvements. Inflation rates have fallen faster than anticipated in most regions, which is viewed as a positive development. The IMF expects global inflation to be at 5.8% in 2024 and 4.4% in 2025, with advanced economies experiencing lower rates. Gourinchas suggests that central banks may consider easing their policy rates in the second half of the year if economic conditions remain favorable.