WASHINGTON: The IMF has raised its outlook for the global economy this year, while maintaining a gloomy forecast over the medium term, according to fresh data published Tuesday.The International Monetary Fund now expects the world economy to grow by 3.2 percent this year, up 0.1 percentage point from its previous forecast in January, and by a further 3.2 percent in 2025, according to the latest World Economic Outlook (WEO) report.Global headline inflation is expected to ease from 5.9 per cent this year to 4.5 percent in 2025, supported by elevated interest rates in many countries around the world.”The global economy remains quite resilient, although there are differences in regions and countries,” IMF chief economist Pierre-Olivier Gourinchas told reporters in a call ahead of the WEO’s publication on Tuesday.”Our baseline scenario is one that is consistent with a global soft landing,” he said, referring to attempts by many central bankers to bring inflation down to target without fueling high unemployment or killing economic growth.The WEO’s publication comes as global financial leaders are gathering in Washington this week for a series of semi-annual meetings hosted by the IMF and World Bank at their headquarters in Washington.Assistance for the world’s most indebted nations and climate change are at the top of the agenda for those meetings.Divergence among advanced economiesThe differences among the world’s advanced economies are stark: The IMF now expects growth in the United States to hit 2.7 percent this year — up 0.6 percentage points from the January forecast — marking an acceleration from the 2.5 percent growth recorded in 2023.Growth in the world’s largest economy is then expected to slow to 1.9 percent in 2025, slightly higher than previously expected.In contrast, the Euro Area is now expected to grow by just 0.8 percent in 2024 — down 0.1 percentage point from January and only slightly above last year’s tepid 0.4 percent growth — before picking up to 1.5 percent in 2025.The outlook for the United Kingdom and Canada this year has also been revised lower, while Japan’s 2024 growth forecast was unchanged.



Source link