IMF reports risks to global growth broadly balanced

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Photo: Daily Sabah

According International Monetary Fund (IMF), the global growth is project at 3.1% in 2024, which would increase to 3.2% in 2025.

The global growth for 2024 is 0.2 percentage points higher on the account of greater-than-expected resilience in the United States and “several large emerging market and developing economies”, said IMF.

The forecast for 2024-25 is however, below the historical (2000-19) average of 3.8% with elevated central bank policy rates to combat inflation, a withdrawal of fiscal support amid high debt weighing on economic activity, IMF added.

IMF projects that risks of global growth are now broadly balanced with disinflation and steady growth.

The institution further notes that amid favorable global supply developments, inflation has been falling faster than expected. Moreover, wage growth has remained contained.

IMF pointed out that major central banks raised policy interest rates to restrictive levels in 2023. This resulted in high mortgage costs, challenges for firms refinancing their debt, tighter credit availability, and weaker business and residential investment.

Meanwhile, governments in advanced economies eased fiscal policy last year. In the United States, the Gross Domestic Product (GDP) already exceeded its pre-pandemic path.

According to IMF, Growth in China is projected at 4.6% in 2024 and 4.1% in 2025. On the other hand, India is projected to remain strong at 6.5% in both 2024 and 2025.

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