The International Monetary Fund (IMF) has held its global growth expectations for 2024 steady, despite lowering forecasts for the United States and Japan. In its latest World Economic Outlook update released on Tuesday, the IMF reiterated a 3.2 percent growth rate for the world economy this year, unchanged from its April forecast.
“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,” the IMF stated. Looking ahead, the fund predicts global growth of 3.3 percent for 2025.
However, the IMF highlighted significant downward adjustments for economic growth in the United States and Japan. These revisions come amid heightened concerns over inflation and escalating trade tensions.
The IMF warned that the risks to inflation have increased, with persistent high prices in the services sector impeding disinflation. This scenario could result in prolonged periods of elevated interest rates, compounded by escalating trade tensions and increased policy uncertainty.
Pierre-Olivier Gourinchas, the IMF’s chief economist, emphasized concerns over trade and industrial policies that could affect global economic integration. The fund highlighted the potential for countries to adopt measures that might disrupt the global economy’s cohesion.
The United States’ growth forecast for 2024 has been downgraded to 2.6 percent, a slight decrease of 0.1 percentage points from April’s projection. This adjustment is attributed to a slower-than-expected start to the year.
Japan’s economic growth forecast for this year has been revised down by 0.2 percentage points to 0.7 percent. The IMF attributes this downgrade to temporary supply disruptions and weak private investment in the first quarter.
Addressing recent political developments, including the attempted assassination of former U.S. President Donald Trump, the IMF indicated that it will consider the implications of such events on its risk assessments. While global growth projections remain stable, the fund acknowledges the potential impact of political instability on economic forecasts.
