The International Monetary Fund has projected that global growth will remain steady at 3.2 percent in 2024 and 3.3 percent in 2025.
According to the News Agency of Nigeria, this was revealed in its latest World Economic Outlook Update Report for July 2024 titled ‘The Global Economy in a Sticky Spot’, which was released on Tuesday.
The report noted that although this projection aligns with the April 2024 WEO, there have been significant developments beneath the surface since then.
It highlighted that growth among advanced economies is expected to stabilize over the coming quarters. For instance, the projected growth for the United States in 2024 has been revised downward to 2.6 percent.
“This is 0.1 percentage point lower than what was projected in April, reflecting the slower-than-expected start to the year.
“Growth is expected to slow to 1.9 per cent in 2025 as the labour market cools and consumption moderates, with fiscal policy starting to tighten gradually.”
According to the report, the Euro area is anticipated to experience a modest increase of 0.9 percent in 2024, following nearly flat growth in 2023.
“This is driven by stronger momentum in services and higher-than-expected net exports in the first half of the year.
The report indicated that growth forecasts for emerging markets and developing economies have been revised upward, driven by stronger economic activity in Asia, notably in China and India.
“For China, the growth forecast is revised upward to five per cent in 2024, primarily on account of a rebound in private consumption and strong exports in the first quarter.
“The forecast for growth in India has also been revised upward, to 7.0 per cent, this year.”
For Latin America and the Caribbean, the report showed that growth had been revised downward for 2024 in Brazil, reflecting the near-term impact of flooding, and in Mexico, due to moderation in demand.
“However, growth has been revised upwards in 2025 for Brazil to reflect reconstruction following the floods and supportive structural factors, for example, acceleration in hydrocarbon production.”
The report highlighted that in the Middle East and Central Asia, ongoing challenges such as oil production dynamics and regional conflicts continued to impact economic prospects negatively.
Specifically, the growth forecast for Saudi Arabia in 2024 was adjusted downward by 0.9 percentage points, primarily due to extended cuts in oil production.
Regarding Sub-Saharan Africa, the report noted a downward revision in the growth forecast.
“This is mainly as a result of a 0.2 percentage point downward revision to the growth outlook in Nigeria amid weaker than expected activity in the first quarter of 2023.”
The document noted that global inflation is projected to continue declining, with expectations that inflation rates will remain higher in emerging markets and developing economies compared to advanced economies, and that the decrease will be slower in these regions.
“However, partly thanks to falling energy prices, inflation is already close to pre-pandemic levels for the median emerging market and developing economy.”
The report said overall, risks to the outlook remained balanced, as in the April 2024 WEO, but some near-term risks had gained prominence.
“These include upside risks to inflation that stem from a lack of progress on services disinflation and price pressures emanating from renewed trade or geopolitical tensions.
“The escalation of trade tensions could further raise near-term risks to inflation by increasing the cost of imported goods along the supply chain.”
The report noted that as output gaps began to narrow and inflation decreased, policymakers faced two critical tasks.
“These tasks are persevering with restoring price stability and addressing the legacies of recent crises, including replenishing lost buffers and durably uplifting growth.
“In the near term, this will require careful calibration and sequencing of the policy mix.”
