Washington, D.C (Washington Insider Magazine) — The International Monetary Fund (IMF) recently predicted gradual global economic growth in 2024, relying heavily on the resilience of the US economy. Although the global economy faces challenges such as rising inflation rates and geopolitical tensions in the Middle East, steady growth is expected.
The IMF expects global GDP growth of 3.2% in both 2024 and 2025. However, the ongoing escalation of tensions between Israel and Iran is a variable that could potentially change this forecast. The effects of this conflict could exert pressure on oil and energy prices and thus influence global inflation rates.
Impact of geopolitical factors
Given possible geopolitical escalations, the IMF anticipates a scenario in which central banks could decide to tighten monetary policy, which would impact economic growth. Pierre-Olivier Gourinchas, Chief Economist at the IMF, emphasized that an intensification of geopolitical tensions could hurt economic growth and lead to a substantial surge in oil, energy, and shipping costs, exerting additional pressure on global economic dynamics.
However, the IMF asserts that a comprehensive analysis of these impacts is premature at this juncture.
Gourinchas highlighted a sustained increase in oil prices by approximately 15%, potentially contributing to a rise in global inflation by around 0.7%. However, the IMF emphasizes that conducting a thorough analysis of these impacts is premature at this stage.
China’s economic landscape
According to France24, While China’s economic data for the first quarter of 2024 exceeded expectations, with GDP growth reaching 5.3%, the IMF maintains its conservative growth forecast of 4.6% for the year. Concerns persist regarding the absence of a comprehensive restructuring plan for the country’s real estate sector, which could exacerbate the crisis.
United States Economic Projections
Contrary to earlier estimates, the IMF anticipates a robust growth rate of 2.7% for the United States in 2024, driven by accelerated employment rates and increased consumer spending since late 2023.
Outlook for Russia
The economic outlook for Russia has improved, with the growth forecast for 2024 being revised upward to 3.2% from the previous estimate of 2.6% in January.
In summary, while the IMF projects a sluggish yet stable global economic growth trajectory, uncertainties stemming from geopolitical tensions and inflationary pressures underscore the need for vigilant monitoring and proactive policy responses to sustain economic stability and growth.