Arab Press

بالشعب و للشعب
Saturday, May 18, 2024

IMF Lowers Global Growth Forecast, Predicts Most Will Avoid Recession

IMF Lowers Global Growth Forecast, Predicts Most Will Avoid Recession

The IMF predicted the global economy will grow by 2.8 percent this year and three percent in 2024, a decline of 0.1 percentage point from its previous forecasts in January.
The International Monetary Fund slightly lowered its outlook for the global economy on Tuesday, while predicting that most countries will avoid a recession this year despite economic and geopolitical concerns.

The IMF predicted the global economy will grow by 2.8 percent this year and three percent in 2024, a decline of 0.1 percentage point from its previous forecasts in January.

The American economy is expected to grow by 1.6 percent in 2023, up 0.2 percentage point on the IMF's previous forecast. US growth is then predicted to slow to 1.1 percent next year, up 0.1 percentage point from January.

"The global economy is recovering from the shocks of the last few years, and particularly of course the pandemic, but also the Russian invasion of Ukraine," IMF chief economist Pierre-Olivier Gourinchas said in a press briefing ahead of the release of the IMF's World Economic Outlook (WEO) report.

The leadership of the World Bank and IMF hope to use this year's spring meetings to promote an ambitious reform and fundraising agenda.

But their efforts will likely be overshadowed by concerns among member states over high inflation, rising geopolitical tension, and financial stability.

Advanced economies drag down growth

The overall picture painted by the WEO is a gloomy one, with global growth forecast to slow in both the short and medium terms.

Close to 90 percent of advanced economies will experience slowing growth this year, while Asia's emerging markets are expected to see a substantial rise in economic output -- with India and China predicted to account for half of all growth, IMF managing director Kristalina Georgieva said last week.

Low-income countries, meanwhile, are expected to suffer a double shock from higher borrowing costs due to high interest rates, and a decline in demand for their exports, Georgieva said. This could worsen poverty and hunger.

The IMF expects global inflation to slow to seven percent this year, down from 8.7 percent last year, according to the WEO forecasts.

This figure remains significantly above the two-percent target set by the US Federal Reserve and other central banks around the world, suggesting monetary policymakers have a long way to go before inflation is brought back under control.

The IMF's baseline forecasts assume that the financial instability sparked by the collapse of Silicon Valley Bank last month has been broadly contained by the "forceful actions" of regulators on both sides of the Atlantic, Gourinchas told reporters.

But he added that central banks and policymakers have an important role to play to buttress financial stability going forward.

Germany on the brink of recession

While the picture is one of slowing growth, almost all advanced economies are still expected to avoid a recession this year and next.

Alongside growth in the US, the Euro area is also forecast to grow by 0.8 percent this year, and 1.4 percent next year, led by Spain, which will see 1.5 percent growth in 2023 and 2 percent growth in 2024.

But Germany is now expected to contract by 0.1 percent this year, joining the UK as the only G7 economy expected to enter recession this year.

The picture is more positive among emerging market economies, with China forecast to grow by 5.2 percent this year. But its economic growth is predicted to slow to 4.5 percent in 2024, as the impact of its reopening from the Covid-19 pandemic fades.

India's economic forecast has been downgraded from the previous forecast in January, but it is still predicted to grow by 5.9 percent this year and 6.3 percent in 2024, providing some much-needed stimulus to the global economy.

And Russia is now expected to grow by 0.7 percent this year, up 0.3 percentage point on January's forecast, despite its invasion of Ukraine.

Poor productivity weighs on medium-term outlook

Looking forward, the IMF forecasts that global growth will fall to three percent in 2028, its lowest medium-term forecast since the 1990.

Slowing population growth and the end of the era of economic catch-up by several countries including China and South Korea are a large part of the expected slowdown, as are concerns about low productivity in many countries, according to Daniel Leigh, who heads the World Economic Studies division in the IMF's Research Department.

"A lot of the low hanging fruit was picked," he told reporters ahead of the publication of the World Economic Outlook.

"On top of that now, with the geopolitical tensions and fragmentation, this is going to also weigh on growth," he said.
Newsletter

Related Articles

Arab Press
0:00
0:00
Close
FedEx Airlines Boeing 767 cargo plane lands on nose at Istanbul Airport
Netanyahu's Firm Stance Amid Rafah Hostage Talks
Blinken on Gaza: Ceasefire is Key to Humanitarian Crisis Resolution
UAE Prime Minister Announces $544M for Home Repairs after Historic Rains, Vows to Learn from Experience
Isfahan Explosions: US Media Reports Israel's Retaliatory Strikes on Iran
Four Dead, Dubai Airport Disrupted: UAE's Heaviest Rains in 75 Years Cause Flooding and Flight Chaos
Dubai Airports: Stranded Tourists 'Living on Duty Free,' Desperate for Food and Water
Heavy Rains Cause Flooding in UAE and Oman: 18 Lives Lost
You can be a very successful player, but a player with character is another level!
Unprecedented Flooding Disrupts Dubai
Ajman Crown Prince Declares Remote Work Day for Government Employees Due to Weather (Except Essential Jobs)
IDF released footage showing Israeli fighter jets downing some of the 300 drones and missiles fired from Iran at Israel.
The West stands with Israel, Iran is furious: "Double standards and irresponsibility"
Huge Queues at Iranian Gas Stations
Stabbing rampage terror attack in Sydney, at least four people killed, early reports that a baby was among those stabbed.
Scandal in Iran after a goalkeeper had the audacity to hug a female fan who stormed the pitch
Iran fired more than 300 drones and missiles at Israel overnight. Israel Reports Light Damage After Iran Launches Large Strike.
Saudi Arabia calls for "restraint" amid Iranian strikes on Israel
Iran launched dozens of drones at Israel on Saturday but they will take hours to reach their targets, Israel's military said
Online YouTube streamer N3ON was just sentenced to AN ENTIRE YEAR in prison in Dubai for filming and live-streaming, without “proper permits”
UN Chief Warns: Gaza Outflow to Egypt Would Derail Israeli-Palestinian Peace
Record Number of Arab Soldiers Serve in IDF Amidst Ongoing Gaza Conflict: A Personal Story of Loyalty and Advocacy
Major Charities Warn of Genocide in Gaza: 'Impossible' to Deliver Aid, Israel Accused of Complicity
Biden Warns Netanyahu: US Aid to Israel Depends on Gaza Civilian Protection
Israel Reopens Gaza Border for Temporary Humanitarian Aid Amid International Pressure
United Arab Emirates suspends diplomatic relations with Israel
DOZENS OF ARMED FIGHTERS ATTACK 3 IRANIAN MILITARY FACILITIES
Qatar PM: Displaced Palestinians Key Issue in Gaza Ceasefire Negotiations
Palestinian Authority Seeks Renewed UN Membership Amid Reforms and International Pressure
Gaza Crisis: Soaring Newborn Mortality Due to Malnutrition and Destroyed Health Facilities
World Bank: $18.5 Billion in Damages to Gaza's Critical Infrastructure and Economy
Iran: Two Generals, Five Officers Killed in Israeli Strike on Syrian Consulate
Israel Passes Law to Potentially Ban Al Jazeera Amid Conflict with Hamas
Turkish local elections: Opposition stuns Erdogan with historic victory
Israel Must "Ensure Urgent Humanitarian Assistance" In Gaza: World Court
Saudi Arabia To Participate In Miss Universe Pageant For 1st Time Ever
Court ruling effectively outlaws Islamic schools in India’s most populous state
"War Crime" Warning by Macron to Israel on Gazans' Forced Transfer
Senior Hezbollah Official Makes Landmark Visit To UAE: Report
Gaza's catastrophic food shortage means mass death is imminent, monitor says
Over 13,000 Children Killed in Gaza, UN Agency Reports
Israeli PM approves Rafah operation plan
Islamic call in British parliament today.
Thai Muslims perform the Taraweeh prayer during the holy month of Ramadan
South Africa announced that Israeli soldiers holding South African citizenship would be arrested upon entering the country
In a Misguided Critique, Jewish US Official Asked to Respect Local Traditions in Saudi Arabia
The Indian government is demolishing mosques as part of the religious war taking place there.
Biden: Netanyahu causes Israel more harm than benefit
Turkish President Erdogan Says March Elections Will Be His Last
Being racist is a full time job
×