The International Monetary Fund (IMF) has slightly raised its global growth forecast for 2024 to 3.2 percent, according to the latest World Economic Outlook Report.
The IMF stated that the global economy is on track for another year of moderate and steady growth in 2024. This outlook is driven by the strength of the United States economy, which is helping to propel global output despite headwinds from continued high inflation, weak demand in China and Europe, and the fallout from two regional conflicts.
The Fund’s 2024 projection for global real GDP growth is 3.2 percent, the same rate as its forecast for 2023. However, the 2024 figure represents a 0.1 percentage point increase from the previous World Economic Outlook report in January. This upward revision was largely due to a substantial upgrade to the growth outlook for the U.S. economy.
Specifically, the IMF raised its 2024 forecast for U.S. economic growth to 2.7 percent, up 0.6 percentage points from the January projections.
In contrast, the latest IMF forecasts show stark divergences for other major economies. For the eurozone, the 2024 growth outlook was cut to 0.8 percent from 0.9 percent in January, primarily due to weak consumer sentiment in Germany and France. Britain’s 2024 growth projection was also reduced by 0.1 percentage points to 0.5 percent as the country grapples with rising interest rates and persistently high inflation.
The IMF further warned that low-income countries are underperforming compared to the global trend. It downgraded growth estimates for these nations, citing higher-than-expected inflation driven by the strength of the U.S. dollar and the impact of soaring food, fuel and fertilizer costs.
The fund also updated its forecast for Russian economic growth in 2024, lifting the projection. The financial institution stated in its report that Russia’s economy is expected to grow by 3.2 percent this year, up from a previous forecast of 2.6 percent published in January.
China and emerging market economies
The IMF left China’s growth forecast unchanged, projecting the Chinese economy will fall to 4.6 percent in 2024 from 5.2 percent in 2023, with a further drop to 4.1 percent in 2025. However, the fund warned that the lack of a comprehensive restructuring package for the country’s struggling real estate sector could prolong the decline in domestic demand and worsen China’s economic prospects.
Turning to other major emerging market economies, the IMF pointed to some brighter spots. The fund raised its forecast for Brazil’s 2024 economic growth by half a percentage point to 2.2 percent. Additionally, the IMF increased India’s 2024 economic growth projection by 0.3 percentage points to 6.8 percent.
The report noted that the G20 major emerging market countries now play a greater role in the global trading system and have the potential to shoulder more of the growth burden going forward.
On the other hand, the IMF cautioned that low-income developing countries continue to suffer from post-pandemic adjustment measures and higher levels of economic “scars” compared to middle-income emerging markets. As a group, the growth forecast for these low-income developing countries in 2024 was reduced to 4.7 percent from a previous estimate of 4.9 percent in January.
The IMF added that the overall economic growth in the Middle East and Central Asian region is projected at 2.8 percent in 2024 and 4.2 percent in 2025.
UAE, Saudi Arabia and Egypt
Regarding the UAE economy specifically, the IMF forecast higher growth for 2024 compared to 2023, projecting it will be the highest in three years. The World Economic Outlook released by the IMF predicted 4.2 percent GDP growth for the UAE in 2025, up from 3.5 percent in 2024 and 3.4 percent in 2023. In 2022, the UAE economy grew 7.9 percent, bouncing back after the COVID-19 pandemic.
For Saudi Arabia, the IMF has raised its expectations for economic growth in 2025 to 6 percent, up from the previous forecast of 5.5 percent earlier this year. However, the fund noted that the Kingdom’s output will grow by 2.6 percent in 2024, down 0.1 percentage points compared to the prior projection.
Additionally, the IMF has maintained its projection for Egypt’s real GDP growth in 2024 at 3 percent, declining by 0.8 percentage points compared to the 2023 estimate.
GCC GDP growth projections
(figures for 2023, 2024 and 2025, in percent)
UAE 3.4 3.5 4.2
Saudi Arabia -0.8 2.6 6.0
Bahrain 2.6 3.6 3.2
Qatar 1.6 2.0 2.0
Kuwait -2.2 -1.4 3.8
Oman 1.3 1.2 3.1
Global GDP growth projections
(figures for 2023, 2024 and 2025, in percent)
U.S. 2.5 2.7 1.9
Germany -0.3 0.2 1.3
France 0.9 0.7 1.4
Italy 0.9 0.7 0.7
Spain 2.5 1.9 2.1
Japan 1.9 0.9 1.0
U.K. 0.1 0.5 1.5
Canada 1.1 1.2 2.3
Russia 3.6 3.2 1.8
Japan 1.9 0.9 1.0
India 7.8 6.8 6.5
China 5.2 4.6 4.1
Pakistan -0.2 2.0 3.5
Brazil 2.9 2.2 2.1
Mexico 3.2 2.4 1.4
Nigeria 2.9 3.3 3.0
South Africa 0.6 0.9 1.2
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