The International Monetary Fund (IMF) has released its latest global economic forecast, projecting stable growth rates of 3.2% in 2024 and 3.3% in 2025. “The forecast for global economic growth is broadly unchanged from that in April,” the IMF said. However, the details reveal varied performances across different regions.
Among advanced economies, the IMF expects growth to converge in the coming quarters. In the United States, projected growth has been revised down to 2.6% in 2024, reflecting a slower-than-expected start to the year. The IMF anticipates a further slowdown to 1.9% in 2025 as the labor market cools, consumption moderates, and fiscal policy tightens.
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In the euro area, economic activity seems to have bottomed out, with a modest pickup of 0.9% expected in 2024, a slight upward revision. Stronger momentum in services and higher-than-expected net exports in the first half of the year are driving this growth. The IMF projects a rise to 1.5% in 2025, supported by rising real wages and higher investment due to easing financing conditions. However, manufacturing weaknesses, particularly in Germany, suggest a sluggish recovery.
Japan faces a downward revision of 0.2% points for 2024 growth, largely due to temporary supply disruptions and weak private investment in the first quarter.
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Emerging markets and developing economies show stronger growth prospects, particularly in Asia. China’s growth forecast for 2024 has been revised upward to 5%, driven by a rebound in private consumption and strong exports. However, the IMF expects a slowdown to 4.5% in 2025, with a continued deceleration to 3.3% by 2029 due to aging and slowing productivity growth. India’s growth forecast has also been revised upward to 7.0%, reflecting improved private consumption prospects, especially in rural areas.
In Latin America and the Caribbean, growth projections for 2024 have been revised downward for Brazil and Mexico due to the impacts of flooding and demand moderation, respectively. However, Brazil’s growth forecast for 2025 has been adjusted upward to account for reconstruction efforts and supportive structural factors, such as increased hydrocarbon production.
The IMF notes that in the Middle East and Central Asia, “oil production and regional conflicts continue to weigh on prospects.” Saudi Arabia’s 2024 growth forecast has been cut by 0.9% points due to extended oil production cuts. In sub-Saharan Africa, growth prospects have been revised downward, with Nigeria’s outlook adjusted by 0.2% points due to weaker-than-expected activity.
