IMF raises forecast for global growth in 2024 to 3.1%

DPA
·2 min read
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International Monetary Fund (IMF) logo stands at a meeting of the annual meeting of the International Monetary Fund and the World Bank. The IMF on 30 January improved its forecast for global economic growth in the coming year, raising its expectations to 3.1% from an earlier forecast of 2.9% in October. Christophe Gateau/dpa
International Monetary Fund (IMF) logo stands at a meeting of the annual meeting of the International Monetary Fund and the World Bank. The IMF on 30 January improved its forecast for global economic growth in the coming year, raising its expectations to 3.1% from an earlier forecast of 2.9% in October. Christophe Gateau/dpa

The International Monetary Fund (IMF) on Tuesday improved its forecast for global economic growth in the coming year, raising its expectations to 3.1% from an earlier forecast of 2.9% in October.

The IMF expects growth of 3.2% in 2025.

"The clouds are beginning to part," wrote IMF chief economist Pierre-Olivier Gourinchas in a blog entry, noting that inflation was declining and growth "holding up."

But in order to achieve goals such as sustainable growth and greater prosperity, the pace of expansion must pick up, the IMF economist emphasized.

The IMF raised its 2024 growth forecast for the United States from 1.5% in October to 2.1%. That would nonetheless be a slight slowdown for the world's biggest economy, which grew by an estimated 2.5% in 2023.

The IMF took a dimmer view of prospects for Germany, lowering its growth forecast for Europe's largest economy to just 0.5% for 2024. The IMF had forecast 2024 growth of 0.9% in Germany back in October.

For Germany, the IMF now predicts that economic growth will rebound to 1.6% in 2025. That, however, is 0.4 percentage points less than in the October forecast.

The IMF also expects the US economy to cool down to 1.7% growth in 2025.

Globally, the IMF sees geopolitical tensions, particularly in the Middle East, as a risk to growth.

Gourinchas pointed out that the attacks by the militant Islamist Houthi militia on freighters in the Red Sea - a key shipping corridor leading to the Suez Canal - have already led to a significant increase in prices for freight shipments between Asia and Europe.

The IMF forecast found that new software based on artificial intelligence could lead to higher labour productivity and income in the medium term. At the same time, the IMF's experts believe that AI-based productivity growth will be felt more quickly in wealthy developed economies.