The International Monetary Fund (IMF) has upgraded the outlook for the world economy and said it is likely to escape a hard landing, noting resilient economic growth — particularly in the United States — and slowing inflation.
The IMF said it expects the global economy to grow 3.1 percent in 2024, a tick up from the 2.9 percent it predicted in October.
“The clouds are beginning to part. The global economy begins the final descent toward a soft landing, with inflation declining steadily and growth holding up,” the IMF wrote in its report. “But the pace of expansion remains slow, and turbulence may lie ahead.”
The IMF predicts global inflation will decline to 4.9 percent in 2024. In advanced economies, it predicts inflation will average around 2.6 percent.
The IMF also raised its predictions for the U.S. economy.
In October, it predicted the U.S. economy would grow 1.5 percent in 2024. Now, it says it expects a 2.1 percent growth.
The economy grew by 2.5 percent last year after year-end growth was fueled by consumers willing to spend more despite higher borrowing costs, The Associated Press reported.
Although the IMF adjusted its prediction, the organization said it still expects slower growth in the U.S. and China, where tight monetary policy is “working through the economy” and “consumption and investment continue to weigh on activity.” The IMF predicts activity will rebound in Europe after a challenging 2023. Brazil, India and Southeast Asia also show “great resilience,” the report said.
The IMF predictions come just after the World Bank predicted the global economy would slow for a third straight year in 2024. It predicted the global economy would grow by 2.4 percent this year, and the U.S. would only grow by 1.6 percent.
The World Bank cited high interest rates in developing countries that make borrowing funds difficult, which therefore slows investment and growth. The U.S. economy is expected to lift the poor performance of other countries, the organization said.