IMF forecasts global economic growth of up to 3.2% in 2024-2025

The International Monetary Fund (IMF) forecasts global economic growth of 3.2% in 2024 and 2025. This is stated in a new report of the World Economic Outlook.

According to the IMF, the forecast is virtually unchanged from the updated review of July and April expectations.

In the euro area, GDP growth will increase to a moderate 0.8% in 2024 due to better export performance. In 2025, it is projected to rise further to 1.2%, driven by stronger domestic demand. The IMF expects that real wage growth will stimulate consumption, while gradual monetary policy easing will promote investment.

The institution notes that in countries such as Germany and Italy, economic growth is being held back by continued weakness in the manufacturing industry. However, while domestic demand in Italy is expected to benefit from the EU-funded National Recovery and Resilience Plan, Germany is experiencing difficulties related to budget consolidation and a sharp drop in real estate prices.

In its October forecast, the IMF downgraded its growth forecast for the Ukrainian economy. Ukraine’s GDP is expected to grow by 3.0% in 2024 (-0.2 percentage points compared to the April forecast). The forecast for 2025 has been lowered to 2.5% from 6.5% in April.

The IMF expects the U.S. economy to grow by 2.8% year-on-year in 2024. At the same time, in 2025, growth will slow to 2.2% due to a gradual tightening of fiscal policy and a cooling labor market.

China’s economic growth will slow from 5.2% last year to 4.8% this year and 4.5% – in 2025. The country has suffered from the collapse of the housing market and weak consumer confidence, but these problems are partially offset by high exports.

Global core inflation is expected to decline from an average annual rate of 6.7% in 2023 to 5.8% in 2024 and 4.3% – in 2025. At the same time, advanced economies will return to their inflation targets faster than emerging and developing countries.

In its September report, the Organization for Economic Cooperation and Development (OECD) forecasted global GDP growth of 3.2% y/y in 2024 and 2025, driven by steady trade growth, improved real incomes, and looser monetary policy in many economies.