On January 30, the International Monetary Fund (IMF) released its latest World Economic Outlook (WEO) report, raising its forecast for global economic growth in 2024 to 3.1% thanks to the unexpected recovery in developed and emerging economies around the world such as the US and China.
The new forecast is 0.2 percentage points higher than the IMF's previous forecast in October 2023.
Speaking to reporters, IMF chief economist Pierre-Olivier Gourinchas said: “The global economy continues to show remarkable resilience, thanks to steadily falling inflation and stable growth.”
However, Mr Gourinchas warned that while the case for a soft landing has increased, growth remains slow and risks remain: "The clouds are starting to lift. The global economy has begun the final steps towards a soft landing, with inflation tapering off and growth holding steady. However, growth remains slow and turmoil could lie ahead."
The IMF forecasts that in 2024 and 2025, global growth will remain below its recent historical average of 3.8% due to the continued impact of high interest rates, the withdrawal of government support to respond to the Covid-19 pandemic, and persistent low productivity.
China is forecast to grow 4.6% in 2024, up 0.4 point but still below the 2023 growth estimate of 5.2%.
India remains the fastest-growing major economy, with growth expected to pick up to 6.5% in 2024, up 0.2 percentage points on strong domestic demand but down from the 6.7% growth India achieved in 2023.
The so-called ASEAN-5 group - comprising Indonesia, Malaysia, the Philippines, Singapore and Thailand - is forecast to grow 4.7% in 2024, up 0.2 point from the previous forecast and an improvement from 4.2% growth in 2023.
Emerging and developing markets in Asia, driven largely by China and India, are expected to grow faster than any other region at 5.2%, up 0.4% from October 2023.
Advanced economies are facing much more modest growth, particularly in the euro area, with the US the only exception to be revised upward in the IMF’s latest forecasts. The IMF now expects the US to grow 2.1% in 2024, up 0.6% from its previous forecast, thanks to better-than-expected growth through the end of last year, but still below the 2.5% pace of 2023.
However, Japan's economic outlook for 2024 is downgraded by 1 percentage point to 0.9% after a strong 1.9% growth in 2023. The IMF said Japan's expected slower growth is related to a number of factors including a weaker yen, pent-up demand and a recovery in business investment.
The resilience of major global economies coupled with faster-than-expected inflation reduces the likelihood of a hard landing - a sharp recession caused by monetary tightening - according to the International Monetary Fund.
Minh Hoa (according to Lao Dong newspaper, Vietnam+)
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