In its World Economic Outlook Update (WEO Update) of January 2024, the International Monetary Fund (IMF) expects the global economy to grow by 3.1% in 2024. Its forecast of growth on a par with that of 2023 reflects the expectation that inflation will continue to fall in an overall robust global economy. The IMF considers the opportunities and risks with respect to this assumption to be broadly balanced.
In Europe, according to the IMF, falling inflation and more stable energy prices are expected to lead to a slight recovery in consumer demand and a year-on-year rise in real incomes in 2024. For the eurozone, the IMF expects gross domestic product (GDP) to rise by 0.9% in 2024, with GDP for Germany expected to grow by 0.5%. For the UK, it expects GDP to rise by 0.6% based on a similar trend.
For the USA, the IMF predicts a slowdown in GDP growth to 2.1% in 2024, citing as main reasons the Federal Reserve’s monetary and fiscal policy and a softening labor market.
Japan’s economy is expected to return to lower growth rates in 2024, after the previous year’s growth was significantly influenced by one-off effects. The IMF expects Japan’s GDP to grow by 0.9% in 2024.
For India, the IMF forecasts a high GDP growth rate of 6.5% in 2024. Continued strong development is also expected in China as a result of fiscal policy support, with the IMF currently estimating GDP growth of 4.6%.
In other emerging and developing economies, the IMF mostly expects a slowdown in economic development in 2024. In Brazil and Russia, for example, the IMF anticipates a rise in GDP of 1.7% and 2.6%, respectively.
The IMF’s forecast is based on assumptions that commodity prices will decline in 2024 and that interest rates will decline in major economies.
The IMF also points toward a number of opportunities and risks. Faster disinflation could have a positive effect, as could stronger structural reform momentum. Significant risks from the IMF’s perspective include commodity price spikes, given the tense geopolitical situation, disruptions in the global supply chain and a slower-than-expected decline in inflation. A worsening of the crisis in the Chinese real estate sector and cuts to global public spending could also lead to lower growth.
