The forecast for this year is revised up by 0.1 percentage points (pp) from the January 2024 WEO Update and 0.3 pp from the October 2023 WEO.
The IMF's April 2024 World Economic Outlook said that global growth is estimated to reach 3.2% in 2023 and is expected to continue at a similar pace in 2024 and 2025. Global inflation is expected to decline from an annual average of 6.8% in 2023 to 5.9% in 2024 and 4.5% in 2025. Risks to the current global outlook has been broadly balanced.
The pace of expansion is low by historical standards, due to both short-term factors, such as borrowing costs and financing freezes remaining high, as well as longer-term effects from the COVID pandemic -19 and Russia's invasion of Ukraine; weak productivity growth; and increasing geo-economic fragmentation.
The report said global inflation is expected to fall from an annual average of 6.8% in 2023 to 5.9% in 2024 and 4.5% in 2025, with economies Advanced economies return to inflation targeting earlier than emerging and developing economies.
The latest forecast for global growth over the next five years – at 3.1% – is the lowest in decades. The pace of convergence towards higher living standards in low- and middle-income countries has slowed, suggesting the persistence of global economic disparities.
The relatively weak medium-term outlook reflects lower per capita gross domestic product (GDP) growth, not least because of persistent structural frictions that prevent capital and labor from moving into manufacturing firms. output effectively.
Risks to the global outlook are now broadly balanced. On the other hand, the new price increases stem from geopolitical tensions, including those from the war in Ukraine and conflicts in Gaza and Israel, along with persistent underlying inflation where the labor market remains further tightening, could increase interest rate expectations and reduce asset prices, a UNCTAD release said citing the WEO report.
The report adds that, amid high government debt in many economies, disruptive tax increases and spending cuts could weaken activity, erode confidence and sap support. Support reforms and spending to reduce risks from climate change.
Fiber2 Fashion News Desk (DS)
