The world’s medium-term economic prospects remain weak, according to IMF’s July WEO update.
Global growth is projected to stay steady at 3.2% in 2024 and tick up slightly to 3.3% in 2025.
The United States, however, will see its growth slow to 2.6% next year, with a further dip to 1.9% expected in 2025 as the labor market cools.
In the euro area, growth is forecasted to pick up, starting at 0.9% in 2024 and rising to 1.5% in 2025, helped by stronger consumption and investment.
China’s economy will grow by 5.0% in 2024, but a gradual slowdown is expected, with growth falling to 4.5% in 2025 and further to 3.3% by 2029.
India, on the other hand, is set to maintain strong growth at 7.0% in 2024, driven by robust private consumption.
Sub-Saharan Africa faces moderate growth, with projections at 3.7% for 2024 and a slight increase to 4.1% in 2025, as key economies like Nigeria and South Africa grapple with ongoing challenges.
Global inflation is expected to slow to 5.9% in 2024, down from 6.7% in 2023, though the pace of disinflation is slower in advanced economies, particularly the US.
Interest rates are likely to stay high for longer, especially in advanced economies, due to persistent inflation in services.
Fiscal challenges are growing, with high debt levels and slow growth adding to economic vulnerabilities.
Despite rising yields, financial conditions remain broadly accommodative, but risks of financial market volatility are increasing.
Global trade is expected to recover, with growth aligning with global GDP at about 3.1% annually in 2024-2025.