By hannover-web.com On October 22, the International Monetary Fund (IMF) released its latest World Economic Outlook report, revising the global economic growth forecast for next year down by 0.1 percentage points to 3.2%. The IMF noted that while central banks around the world have managed to combat inflation without triggering economic recession, risks related to armed conflicts, tightening monetary policies, and trade protectionism are steadily increasing. When assessing the risks to the economic outlook, the IMF pointed out the heightened likelihood of countries raising tariffs and enacting retaliatory measures.
The IMF projects a global economic growth rate of 3.2% for both 2024 and 2025, a slight downward adjustment of 0.1 percentage points from previous estimates made in July.
For the United States, the IMF revised its economic growth forecast upward by 0.2 percentage points to 2.8% for this year, primarily driven by rising wages and asset prices fueling higher-than-expected consumer spending. The forecast for U.S. economic growth in 2024 was also raised by 0.3 percentage points to 2.2%.
In contrast, the growth forecasts for the Eurozone for this year and next were downgraded to 0.8% and 1.2%, respectively. Japan’s economic growth forecast was lowered by 0.4 percentage points to 0.3% due to ongoing supply chain disruptions. Meanwhile, India stands out as a bright spot, with its growth forecast remaining the highest among major economies at 7% for 2024 and 6.5% for 2025, consistent with earlier predictions from July.
Regarding China, the economic growth forecast for this year was revised downward by 0.2 percentage points to 4.8%. This adjustment reflects that the positive effects of net exports only partially offset the impacts of a persistently weak housing market and low consumer confidence. The growth forecast for next year is still set at 4.5%, but it’s important to note that the IMF did not take into account recently announced stimulus measures by the Chinese government. Additionally, the IMF estimates Taiwan’s economic growth rate at 3.7% for this year, a significant upward revision of 0.6 percentage points from April’s forecast, with a projected growth rate of 2.7% for next year.
The IMF commended central banks for reducing inflation without causing economic downturns; however, the global economy still faces numerous risks, including monetary policies that suppress growth, increased sovereign debt pressures in emerging and developing economies, and rising food and energy prices influenced by climate impacts and geopolitical tensions. The IMF’s Chief Economist, Pierre-Olivier Gourinchas, stated, “These risks are gradually intensifying, trending downward, and uncertainty in the global economy is increasing.”
While the IMF did not specifically mention U.S. Republican presidential candidate Donald Trump’s pledges to impose tariffs on imported goods, its forecasts encompass a negative scenario wherein the U.S., Eurozone, and China impose 10% tariffs on each other’s goods.
Among major economies, Mexico experienced the most significant downward revision in growth estimates, with this year’s forecast lowered by 0.7 percentage points to 1.5%, and a reduction of 0.3 percentage points to 1.3% for next year.
