IMF says global ‘soft landing’ in sight, lifts 2024 growth outlook

The IMF upgrades global economic growth forecast, citing improved outlook for the US and China, but warns of risks.

The International Monetary Fund on January 30 edged its forecast for global economic growth higher, upgrading the outlook for both the United States 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 lender's updated World Economic Outlook showed that a "soft landing" was in sight, but overall growth and global trade still remained lower than the historical average.

"The global economy continues to display remarkable resilience, with inflation declining steadily and growth holding up. The chance of a 'soft landing' has increased," Mr. 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 attacks in the Red Sea that could disrupt commodity prices and supply chains.

Delays in announced fiscal consolidation in what Mr. Gourinchas called "the biggest global election year in history" could boost economic activity but might also spur inflation, he added.

The IMF said the improved outlook was supported by stronger private and public spending despite tight monetary conditions, as well as increased labour force participation, mended supply chains and cheaper energy and commodity prices.

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%.