IMF Adjusts Global Economic Forecast Amid Persistent Inflation Challenges

The International Monetary Fund has revised its economic outlook for 2024. It has upgraded growth forecasts for China, India, and Europe, while lowering expectations for the US and Japan. Despite global inflation easing, services inflation remains stubborn, potentially impacting future growth.

The International Monetary Fund (IMF) is revising its economic outlook for the year, boosting growth predictions for China, India, and Europe, while downgrading expectations for the United States and Japan. This adjustment comes amid persistent inflation challenges, particularly in the services sector, such as airline travel and restaurant meals.

Globally, the IMF still anticipates a lukewarm 3.2% growth rate for this year, maintaining its earlier forecast from April but down from the 3.3% growth in 2023. Prior to the pandemic, global economic growth averaged 3.8% annually from 2000 to 2019.

IMF chief economist Pierre-Olivier Gourinchas highlighted that China and India would be major contributors to global growth, partly due to strong consumer spending and a surge in Chinese exports earlier this year. However, the IMF cautioned that persistent services inflation could prompt central banks to maintain higher interest rates longer, potentially dampening global economic growth.

(With inputs from agencies.)