IMF Projects Modest Global Economic Growth Amid Challenges
The International Monetary Fund (IMF) has maintained a cautious outlook for the global economy, projecting modest growth over the next two years amidst various challenges. In its latest World Economic Outlook (WEO) update, the IMF held its forecast for global real GDP growth in 2024 at 3.2%, with a slight increase to 3.3% expected in 2025.
Pakistan's economic forecast remains a focal point, with the IMF predicting a growth rate of 3.5% for fiscal year 2024-25, slightly below the government's target of 3.6%. The country faced setbacks in the previous fiscal year, achieving a GDP expansion of 2.4%, lower than the anticipated 3.5%, attributed to persistent economic mismanagement compounded by external shocks such as the COVID-19 pandemic, the Ukraine conflict, supply chain disruptions, and severe flooding.
Globally, the IMF highlighted a convergence in growth trajectories among major advanced economies as output gaps narrow. The United States, experiencing a slowdown in consumption, saw its 2024 growth forecast revised downward to 2.6%, while Europe anticipates a rebound. Meanwhile, China's economy showed resilience with the IMF raising its growth forecast to 5.0% for 2024, driven by robust exports and a rebound in private consumption.
Inflation remains a persistent concern globally, fueled by elevated services prices and supply chain pressures. The IMF cautioned that geopolitical tensions and trade disputes could exacerbate inflationary pressures, potentially prolonging higher interest rates and increasing economic risks.
Looking ahead, the IMF emphasized the need for prudent economic policies to stabilize prices, rebuild fiscal buffers depleted during the pandemic, and promote productivity-enhancing measures. The report underscored the importance of resolving structural challenges, such as China's ongoing property market woes, to bolster consumer confidence and sustain economic momentum.
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Amid uncertainties stemming from geopolitical shifts and election cycles worldwide, the IMF warned against protectionist policies that could trigger trade conflicts and hinder global economic recovery. Instead, it advocated for cooperative international frameworks aimed at fostering sustainable growth and stability across economies.
As countries navigate through a complex economic landscape, the IMF's recommendations underscore the critical importance of policy continuity, fiscal resilience, and international collaboration to mitigate risks and promote inclusive economic progress globally.
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