Slow, steady global economic growth likely in 2024: IMF

The global economy is set for another year of slow but steady growth, the International Monetary Fund (IMF) has said.

"We find that the global economy remains quite resilient," Pierre-Olivier Gourinchas, the IMF's chief economist, told reporters on Tuesday.

Many countries also are showing less "scarring" from the Covid-19 pandemic and cost-of-living crises, returning to pre-pandemic levels of output more quickly than previously predicted, the IMF report found.

The IMF forecasts global real GDP growth of 3.2 percent for 2024 and 2025 — the same rate as in 2023.

The 2024 forecast was revised upward by 0.1 percentage point from the previous World Economic Outlook estimate in January, largely due to a significant upward revision in the US outlook.

Here is a breakdown by major economies:

US compared to Europe

The IMF forecast 2024 US growth of 2.7 percent compared to the 2.1 percent projected in January, on stronger-than-expected employment and consumer spending at the end of 2023 and into 2024.

It expects the delayed effect of tighter monetary and fiscal policy to slow US growth to 1.9 percent in 2025, though that also was an upward revision from the 1.7 percent estimate in January.

But the latest IMF forecasts showed stark divergences with other countries, including in the eurozone, where the 2024 growth forecast was revised downward to 0.8 percent from 0.9 percent in January, primarily due to weak consumer sentiment in Germany and France.

China property woes

The IMF left unchanged its forecast for China's 2024 growth to fall to 4.6 percent from 5.2 percent in 2023, with a further drop to 4.1 percent for 2025.

But it warned that the lack of a comprehensive restructuring package for the country's troubled property sector could prolong a downturn in domestic demand and worsen China's outlook.

Such a situation could also intensify deflationary pressures in China's economy, leading to a surge in cheap exports of manufactured goods that could stoke trade retaliation by other countries.

Brazil, India shine

But the global lender noted bright spots in some other big emerging market countries, raising its growth forecast for Brazil's economy in 2024 by half a percentage point to 2.2 percent and increasing the forecast for India's economic growth by 0.3 percentage point to 6.8 percent.

It noted that the Group of 20 large emerging market countries are now playing a bigger role in the global trading system and have the capability to shoulder more of the growth burden going forward.

But the IMF said low-income developing countries continue to struggle with post-pandemic adjustments and greater levels of economic "scarring" than middle-income emerging markets.

Russian resilience

In one of the biggest surprises, Russia's 2024 growth forecast was increased to 3.2 percent from the 2.6 percent projected in January.

The report attributed the increase partly to continued strong oil export revenues amid higher global oil prices despite a price-cap mechanism imposed by Western countries, as well as strong government spending and investment related to war production, along with higher consumer spending in a tight labor market.