On the contrary, the economy of Latin America and the Caribbean is slightly worsening. It will grow 1.9 per cent this year.
The International Monetary Fund (IMF)remained unchanged on Tuesday its global growth forecast for 2024anticipating an improvement in China and India and confirming previous forecasts for advanced economies.
In the third and final update of its annual report, the IMF forecasts growth of 3.2% this year and slightly improves its forecast by 2025 to 3.3% (0.1 percentage points).
The Fund had already twice revised its forecasts for this year, both slightly upwards, since last October.
Still, global growth remains on a historically low medium-term trend, far from 3.8% between 2000-2019.
“We have two areas of concern,” IMF chief economist Pierre-Olivier Gourinchas warned in statements to AFP.
“One refers to the budgetary trajectory of a number of countries where public finances have been very tense (…), and the second to industrial and commercial policies, and the risk of geoeconomic fragmentation,” he said.
The gap between the world’s major economies will remain significant in 2024, with an expected growth of 2.6 per cent for the United States, slightly lower than 0.1 percentage points than the previous estimate, compared with only 0.9 per cent for the eurozone (0.1p) in March.
For the world’s main economy, “our projection does not vary greatly and we do not expect a great variation in the event of a drop in rates,” Gourinchas stressed.
In Europe, “activity remains stronger in services than in industry, which means that countries that depend on industry, such as Germany, are falling a little behind,” Gourinchas explained.
The forecasts for the German economy are therefore maintained unchanged (0.2%).
In Spain the opposite is the case, with an expected growth of 2.4% (0.p.), remaining among the most powerful European economies.
With regard to emerging countries, the Fund is more optimistic than last March, particularly for China and India thanks to domestic demand and increased exports.
For China, the revision is 0.4 points, with an expected growth of 5%, while India’s should reach 7% (-0.2p).
Russia remains unchanged at 3.2 percent for this year.
On the contrary, the economy of Latin America and the Caribbean is slightly worsening. It will grow 1.9% this year (-0.1 pp) and 2.7% in 2025, the IMF predicted.
The Fund expects the Brazilian economy to expand 2.1% (-0.1 pp) and Mexico 2.2% (-0.1 pp).
The downward revision is due “to the short-term impact of major flooding,” the financial organisation says.
By 2025 it improves the forecasts: the Brazilian grows 2.4 (-0.3pp) and the Mexican 1.6% (-0.2pp).
This article has been translated after first appearing in Diario El Mundo