(Washington) Supported by the economy of the United States and certain emerging countries, starting with India and Brazil, the global economy seems on track to achieve better performance than initially expected, the Fund estimated on Tuesday International Monetary Fund (IMF), which remains cautious for 2025.
The institution, based in Washington, now expects global growth of 3.2% for 2024, revised slightly higher than its January estimate of 3.1%, and at the same level in 2025, unchanged by compared to its forecasts at the start of the year.
This is the second positive revision of the Fund’s expectations, but this expected performance of the global economy would confirm its slowdown in the long term, being at a level significantly lower than the historical trend observed between 2000 and 2019, of 3.8% on average, and even more in the last century.
“The global economy remains resilient”, nevertheless underlined to the press the chief economist of the IMF, Pierre-Olivier Gourinchas, “there are certainly differences from one region to another, but despite pessimistic forecasts, the economy has held up and inflation is approaching the target.”
Despite rates which remain high and inflation which evolves differently depending on the country, close to the target in Europe or low in China, but still too high in the United States, the solidity of the employment and consumption market allows the global economy to show a certain solidity.
This is partly true for the world’s largest economy, the United States, whose growth forecasts have once again been significantly revised upwards.
Divergence between advanced economies
After a positive revision of 0.6 percentage points (pp) in January compared to initial forecasts in October, the IMF has once again revised, in the same proportion, American growth for this year, which it now expects at 2.7%.
“We have observed a marked increase in both employment and productivity, strong demand from consumers and public spending,” detailed Mr. Gourinchas, “we see an economy that will potentially remain solid from on the demand side, but also an off-the-charts budgetary orientation.”
A trend which, however, is not found in other advanced economies and particularly in the euro zone, whose growth, already weak, has been revised down slightly, to 0.8% (-0.1 pp).
This is due to the fragility of the region’s two largest economies, Germany and France, whose growth is in both cases revised downwards by 0.3 pp, to 0.2% and 0.7% respectively.
“We expected to see a catch-up in terms of activity. Unlike the United States, there is no overheating of the economy, and this makes the decisions of the European Central Bank more difficult; it must act cautiously in its cuts and avoid maintaining a restrictive monetary policy for too long. , insisted the chief economist of the IMF.
Italy too is expected to continue slowing, also at 0.7% (unchanged), but Spain is expected to see a significantly more positive trend, up 0.4 pp, to 1.9%.
Outside the European Union, the United Kingdom should also see its economy remain sluggish, with growth expected at just 0.5% (-0.1 pp).
Less between emerging
On the emerging side, India and Brazil are the countries having experienced the largest upward revision, respectively at 6.8% and 2.2% anticipated this year.
For India, the good performance of domestic demand as well as the increase in the active population will support growth which will be among the highest in the world.
As for Brazil, anticipated growth remains lower than in 2023, even if better than initially expected, in particular due to the effects of monetary tightening and ongoing budgetary consolidation.
For China, however, its forecasts remain unchanged, with 4.6% growth expected this year, a sign that the slowdown in the Chinese economy continues.
“The weaknesses observed since last year are persistent. There are some concerns due to low domestic consumption and we can expect activity to remain moderate for some time to come,” underlined Pierre-Olivier Gourinchas.
As in 2023, the Russian economy should remain robust, with a new upward revision of growth, now expected this year at 3.2% (+0.6 pp), despite the economic sanctions still in place. , but which remains supported by the volume of public spending, particularly military spending in the context of the war in Ukraine.