BancaMarch | The good and “less good” news from the IMF forecasts. Starting on the more optimistic side, they revise growth projections slightly upwards and suggest that the global economy may be approaching a “soft landing”.
The “less good” refers to projections over a five-year horizon (+3.1%), the lowest in decades.
GDP growth estimates for the global economy in 2024 increase by one tenth of a percentage point from those published in January, to +3.2%. Global output is thus expected to maintain the same pace in 2023, 2024 and 2025. Developed economies will show a subtle increase – from +1.6% (2023) to +1.7% (2024) and +1.8% (2025) – offset by a modest decline in emerging economies – from +4.3% (2023) to +4.2% (2024 and 2025).
As for the weakness of growth in the next five years, it is explained by both short and long term reasons: in the first group belong high borrowing costs and the withdrawal of fiscal support; in the long term, the slowdown in productivity, geopolitical fragmentation and armed conflicts are of importance. In terms of global inflation, we see a process of containment from +6.8% in 2024 to +5.9% in 2024 and +4.5% in 2025, with developed economies returning to their targets before emerging economies.
By region, the US surprises by raising its GDP growth revision by up to six tenths of a percentage point to +2.7% in 2024 (vs. +2.5% in 2023). On the other side of the Atlantic, the eurozone has not been so lucky, and the forecast for this year is revised down by one tenth of a point, registering an increase of +0.8% compared with anaemic growth of +0.4% in 2023. In the breakdown of the main eurozone countries, the 2024 forecast for Spain increases by four tenths of a percentage point and remains the leader, with an output change of 1.9%. In contrast, the projections for France and Germany fall by three tenths, showing growth this year of only +0.7% and +0.2%, respectively. As for China, there are no changes in the forecasts, maintaining a progressive deceleration process: +5.2% in 2023, +4.6% in 2024 and +4.1% in 2025.
