IMF says global ‘soft landing’ in sight

The International Monetary Fund (IMF) on Tuesday edged its forecast for global economic growth higher, upgrading the outlook for both the US and China – the world’s two largest economies – and citing faster-than-expected easing of inflation. The IMF’s Chief Economist, Pierre-Olivier Gourinchas said, “The global economy continues to display remarkable resilience, with inflation declining steadily and growth holding up. The chance of a ‘soft landing’ has increased,” Gourinchas told reporters in Johannesburg, adding, “We are very far from a global recession scenario.” But he cautioned that the base of expansion was slow and risks remained, including geopolitical tensions in the Middle East and in the Red Sea that could disrupt commodity prices and supply chains. Delays in announced fiscal consolidation in what Gourinchas called “the biggest global election year in history” could boost economic activity but might also spur inflation, he added. The IMF forecast global growth of 3.1% in 2024, up two-tenths of a percentage point from its October forecast, and said it expected unchanged growth of 3.2% in 2025. The historical average for the 2000-2019 period was 3.8%.