The IMF sees a runway for a “soft landing” for global growth, the fund’s head of research, Pierre-Olivier Grinchat, told the World Economic Forum in Johannesburg, South Africa, on Tuesday (30 January). The statement was made at the presentation of the Economic Outlook (WEO).
“The global economy continues to show remarkable resilience, with inflation steadily declining and growth sustained. This increases the possibility of a soft landing. However, the pace of expansion remains slow and risks remain.” Grinchas told reporters.
Global growth is projected to be 3.1% in 2024 and 3.2% in 2025, with better-than-expected resilience in the United States and several countries, and the 2024 forecast is expected to increase from the October 2023 World Economic Outlook ( It is expected to be 0.2 percentage points higher than WEO). Large emerging market and developing economies, and financial support from China.
However, the forecast for 2024-2025 is lower than the past (2000 This is lower than the average of 3.8% (from 2019 to 2019). growth.
Disinflation and stable growth reduce the likelihood of a hard landing, and risks to global growth are broadly balanced.
“At the beginning of 2023, downside risks to economic activity and upside risks to inflation prevailed. Perhaps the fact that inflation is so persistent that the fight against inflation could lead to a recession “We see that there is a lot of concern about this. And a year later, we are in a situation where growth is stabilizing and inflation is falling. So this is certainly a very good development,” said the fund’s chief economist. said.
Inflation rates are falling faster than expected in most regions amid easing supply-side issues and restrictive monetary policies. Global headline inflation is expected to fall to 5.8% in 2024 and 4.4% in 2025, with forecasts for 2025 revised downward.
Grinchas noted that the central bank will be following a narrow path in its goal of controlling inflation while ensuring continued economic growth.
“Therefore, we believe that if central banks continue to tighten for too long, economic activity may slow, financial conditions may tighten, and supply shocks may return. However, there is also the potential for a positive turnaround in the global economy. Grinchas said inflation continues to fall and is on target, and central bank easing accelerates. said that it may be possible.
Grinchas expressed optimism that major central banks are doing their job and are watching data to inform when they can start cutting interest rates. That could happen in late 2024, he said.
“When you put all this together, what we are seeing is that central banks are agreeing with the assessment that they will probably postpone easing until late 2024. “We expect the European Central Bank to postpone easing,” Grinchus added.
The team was presenting the IMF’s forecasts, which are released four times a year, in Johannesburg. The fund expects sub-Saharan Africa’s growth to pick up, despite lowering its forecasts for the region’s large economies such as Nigeria and South Africa. Deputy Chief Economist Daniel Lee said promoting governance reforms in the region would boost investor confidence and boost growth.
“Addressing governance weaknesses therefore applies not only to the current South African situation, but to sub-Saharan Africa as a whole. There are a number of structural bottlenecks that could create an environment that attracts investment, including from wealthy developed countries that have the capital to bring investment into this potentially very dynamic region.” said.
A copy of the full report is available at IMF.org/WEO.