In 2024, the International Monetary Fund (IMF) foresees a smooth descent for the global economy, as revealed by Julie Kozack, an IMF representative. She anticipates ongoing strength and adaptability to persist throughout this period. The IMF’s spokesperson, during a media briefing in Washington ahead of an imminent release of the fund’s economic forecasts, expressed optimism by stating that the global economy is on the edge of a smooth and gentle descent. In a surprising revelation, she shared that the previous year demonstrated an exceptional level of endurance beyond their initial predictions.
With unwavering confidence, she affirmed that this remarkable resilience is foreseen to persist uninterrupted well into the year 2024. Kozack stated that their overall perspective on the future is that they are on the verge of achieving a smooth transition in the global economy. Her forecast entails a global diminishment of inflation that will persist without inflicting any detrimental repercussions in the form of a recession. During the month of October, the International Monetary Fund (IMF) projected that the worldwide economy would experience a growth rate of 3.0 percent by the year 2023.
Low-income nations are in danger of slipping even further behind.
This estimation was slightly higher than the earlier forecasts made throughout the year. However, the IMF anticipated a slight decrease in growth to 2.9 percent by the year 2024. The global economy is confronted with formidable challenges as it strives to recover from the aftermath of the Covid-19 pandemic, causing economic casualties in various nations. These challenges are further highlighted by the International Monetary Fund’s below-average growth projections compared to historical standards. She mentioned that the fund is currently grappling with an obstacle in the form of the pandemic’s unpredictable recovery speed.
Moreover, she expressed concern that low-income nations, in particular, are in danger of slipping even further behind. Kozack emphasized that the challenges faced by the global community, which include the pandemic and unexpected surges in food and oil prices, have inflicted a severe toll on their recovery. She further stated that the primary objective of the IMF is to extend assistance to the most susceptible members within the worldwide society. According to a previous statement made by the Peterson Institute for International Economics (PIIE), the global economy is expected to witness a growth of 3.4% in 2022.
Central banks will be compelled to maintain elevated policy rates.
Also, it will be followed by a projected expansion of 3% in 2023 and 2.8% in the year 2024. The statement suggested that while a smooth arrival is probable in many nations, it is not guaranteed. In its Fall 2023 Global Economic Prospects report, the Peterson Institute for International Economics highlighted that although inflation seems to be subsiding in many nations, it still stands significantly higher than the goals set by central banks. In light of this, it is foreseen that the majority of central banks will be compelled to maintain elevated policy rates throughout the upcoming year.
As a consequence, the resulting stringent financial environment will impede the growth of demand and decelerate economic activity. In spite of this, based on the information currently accessible, it is indicated by the PIIE that the majority of nations are expected to encounter growth below the usual levels, yet it will remain positive, as inflation decreases rather than entering a state of recession. In 2024, the majority of major economies across the globe are expected to experience varying degrees of restrained growth, according to the report released by the institute.
There’s an anticipation of a 0.3% decrease in UK real GDP growth for 2023.
The text provided highlighted the United States as an illustrative example, pointing out that both the euro area and the United Kingdom are expected to face hindered economic activity due to stringent financial conditions. Notably, the United Kingdom has recently entered into a mild recession. According to the statement, there’s an anticipation of a 0.3 percent decrease in UK real GDP growth for the year 2023, followed by a 0.2 percent decline in 2024. However, it noted that while there may be a slight improvement in European growth in 2024, the overall recovery in that region is still vulnerable. The PIIE anticipates a mere 0.6% increase in the euro area’s real GDP for the year 2023, followed by a slightly improved projection of 1% growth for the current year, 2024.