IMF keeps global growth forecast unchanged at 3.2% for 2024

Global growth steady at 3.2%

The International Monetary Fund, on July 16, predicted the global economy to register 3.2 percent growth in 2024, unchanged from April.

The multilateral institution predicted a stable path to growth, with 2025 expected numbers to be a tad higher at 3.3 percent in 2025.

“The forecast for growth in emerging market and developing economies is revised upward; the projected increase is powered by stronger activity in Asia, particularly China and India,” it said.

India’s FY25 growth forecast has been revised upwards to 7 percent from 6.8 percent projected in April, while China's growth estimate has been revised upward to 5 percent from 4.6 percent for 2024.

The fund revised the US and Japan forecast downwards. The US economy is now expected to grow 2.6 percent from 2.7 percent predicted earlier, whereas Japanese economy is expected to grow at 0.7 percent—0.2 percentage points lower.

The fund pointed out that risks to growth were balanced.

“Services price inflation is holding up progress on disinflation, which is complicating monetary policy normalisation. Upside risks to inflation have thus increased, raising the prospect of higher-for-even-longer interest rates, in the context of escalating trade tensions and increased policy uncertainty,” it said.

On the other hand, it noted that structural reforms could have positive spillovers.

“Near-term challenges aside, policymakers must act now to revitalize declining medium-term growth prospects,” the fund added.

Trade growth forecast was also revised upwards by 0.1 percentage points for the two years. Trade growth is expected to pick up to 3.1 percent in 2024 and further to 3.4 percent in 2025, IMF pointed out.