IMF Raises US Growth Outlook, Lowers China; Predicts Sluggish Global Economy
US: The International Monetary Fund (IMF) has revised its 2024 economic growth forecasts, increasing projections for the U.S., Brazil, and Britain, while cutting estimates for China, Japan, and the euro zone. Despite these adjustments, the IMF maintains that global GDP growth will remain steady at 3.2%, the same as projected in July. Growth is expected to continue at 3.2% in 2025, slightly down from earlier forecasts, with medium-term growth predicted to decline to a "mediocre" 3.1% over the next five years, significantly below pre-pandemic trends. Notably, the U.S. growth forecast for 2024 has been raised by two-tenths of a percentage point to 2.8%, attributed to stronger consumer spending fuelled by rising wages and asset prices, while Brazil’s growth was upgraded to 3.0% due to increased private consumption and investment.
In contrast, China's growth rate for 2024 has been cut by two-tenths of a percentage point to 4.8%, hindered by ongoing weaknesses in the property sector and low consumer confidence. Germany's growth outlook has been marked down to zero for the year, impacting the euro zone’s overall forecast to 0.8% for 2024 and 1.2% for 2025. Britain's growth forecast has improved by four-tenths of a percentage point to 1.1% for 2024, thanks to decreasing inflation and interest rates. Meanwhile, Japan’s growth estimate has been reduced to 0.3% due to lingering supply chain disruptions. India remains a standout, projected to achieve growth rates of 7.0% in 2024 and 6.5% in 2025, unchanged from July. The IMF also highlighted risks including potential trade wars, monetary policy impacts, and commodity price spikes due to geopolitical conflicts.
Source: - Zawya