On Tuesday, the International Monetary Institution (IMF) slightly raised its global growth forecast, saying the economy had proved "highly resilient" despite inflationary pressures and changes in monetary policy.
The IMF now expects global growth of 3.2% in 2024, up 0.1 percentage point from an earlier January forecast, and in line with growth forecasts for 2023. Growth is expected to grow at a similar rate of 3.2% in 2025.
The chief economist of the IMF, Pierre-Olivier Gourinchas, informed that the findings show that the global economy is headed for a "soft landing", following the economic crisis, and that the risks to the current outlook are generally balanced.
"Despite bleak forecasts, the global economy remains resilient, with steady growth and inflation slowing along with growth," he reported in a blog post.
Growth is expected to be led by advanced economies, with the United States already exceeding pre-Covid-19 pandemic trends and the European zone showing strong signs of recovery. However, a bleaker outlook in China and other large emerging market economies may put pressure on global trading partners, the report said.
China, whose economy is still weakened by a decline in its real estate market, is listed among several negative risks potentially affecting the global economy. Also included in the list of risks are price increases driven by geopolitical concerns, trade tensions and prolonged high interest rates.
Central banks are now the focus for signals about the future direction of inflation, with views differing on when the Federal Reserve and the European Central Bank will cut rates. Some analysts have recently forecast a possible Fed rate hike as strong inflation and rising tensions in the Middle East weigh on economic sentiment.
The IMF said it sees global inflation declining from an annual average of 6.8% in 2023 to 5.9% in 2024 and 4.5% in 2025, with advanced economies returning to their inflation targets earlier than emerging market economies and developing countries.
Despite the brighter outlook on Tuesday, global growth remained low by historical standards, partly due to weak productivity growth and rising geopolitical tensions. The IMF's five-year forecast sees global growth at 3.1%, its lowest level in decades.
