International Monetary Fund (IMF) It cut its eurozone growth forecast to 0.8% in 2024 and 1.2% in 2025, warning of risks to economic health from conflicts, the possibility of a trade war and a hangover from tight monetary policy. .
In its latest World Economic Outlook, the IMF reaffirmed its forecast for global GDP to grow by 3.2% this year. The group also forecasts next year's growth rate to be 3.2%, 0.1 percentage point lower than its July forecast.
Medium-term growth is expected to fall to a “mediocre” 3.1% within five years, well below pre-pandemic trends, the report showed. The IMF also lowered its outlook for China and Japan, and raised its outlook for the US, UK and Brazil.
Pierre-Olivier GrandchatThe IMF's chief economist said the United States, India and Brazil had shown resilience and had achieved a “soft landing” in which inflation subsided without large-scale job losses.
“The fight against global inflation appears to have been largely won, even as price pressures persist in some countries,” Grinchas said in a blog post.
Gorichas told Reuters that without interest rate cuts in some countries, there was a risk that monetary policy would become too tight “mechanically” as inflation subsides, weighing on growth and employment.
“At the moment, our assessment of monetary policy in most regions is in the direction we want, but if inflation continues to decline, central banks will have to pay close attention to what is happening on the economic activity front. We have to start.”
The IMF has revised its US growth forecast upward from 2.6% to 2.7% in 2024 and from 1.9% to 2.2% in 2025, citing stronger-than-expected rises in consumption, wages, and asset prices.
Brazil's economy is currently expected to grow by 3% on the back of strong personal consumption and investment, but Mexico's economy is expected to grow by 1.5% from the previous 2.2% due to the impact of monetary tightening. has been done.
China's forecast was lowered from 5% to 4.8% as export growth is offset by continued weakness in the real estate sector and weak consumer confidence, while the 2025 forecast was revised to 5%. Not yet.
Despite widespread optimism about Spain's economy, Germany's zero growth this year is dampening expectations for the eurozone. Spain's economy is expected to expand by 2.9%, up from July's forecast of 2.4%.
Supply disruptions cut Japan's growth forecast from 0.7% to 0.3%, while the UK economy is expected to grow 1.1% rather than 0.7% as lower inflation and lower interest rates are expected to stimulate consumer demand has been done.
India's growth rate is expected to be the highest among major economies, at 7% in 2024 and 6.5% in 2025.
Photo: International Monetary Fund (IMF) Managing Director Kristalina Georgieva. (Photo: MANDEL NGAN/AFP via Getty Images)
