Global economy shows resilience with increased growth outlook
Date
4/17/2024 3:24:10 AM
(MENAFN) In its latest World Economic Outlook report released on Tuesday, the International Monetary Fund (IMF) has marginally increased its global growth forecast for 2024 to 3.2 percent. Despite this modest uptick, the IMF underscores a narrative of steady but sluggish global economic expansion. This outlook is buoyed primarily by the robust performance of the United States economy, which is poised to offset challenges posed by persistent high inflation, sluggish demand in key markets such as China and Europe, and the lingering impacts of regional conflicts.
The IMF anticipates a continuation of this growth trajectory with a consistent global real GDP growth rate of 3.2 percent for both 2024 and 2025, mirroring the pace observed in 2023. The upward revision for 2024, albeit marginal at 0.1 percentage points, can largely be attributed to heightened expectations for economic growth in the United States.
Chief Economist of the IMF, Pierre-Olivier Gorinchas, emphasized the resilience exhibited by the global economy amidst these challenges during a press briefing. He highlighted a notable trend of countries defying grim recession forecasts, particularly as central banks respond by tightening monetary policy to combat inflationary pressures.
One encouraging aspect highlighted in the IMF report is the diminishing "scarring" effects from the Covid-19 pandemic and associated cost-of-living crises. Many nations are rebounding to pre-pandemic production levels at a faster pace than previously anticipated, signaling a degree of resilience and adaptability within the global economic landscape.
Despite signs of inflation moderating, Gorinchas cautioned that progress in aligning inflation rates with central bank targets has slowed in recent months. Notably, he referenced robust demand indicators in the United States as a factor influencing this trend. While the IMF anticipates a gradual decline in inflation over the current year, Gorinchas suggested that the Federal Reserve's adjustment of interest rates might not unfold as rapidly as market expectations dictate.
In essence, while the global economy displays resilience and a trajectory towards gradual recovery, it remains beset by challenges, including inflationary pressures and regional conflicts. The IMF's projections underscore a cautious optimism tempered by the need for continued vigilance and adaptive policy responses to navigate uncertainties ahead.
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