09:47 AM
The Global economy It will grow 3.2% this year and the same next year, a sign of “extraordinary resilience,” with an improvement in developed countries like the United States and emerging markets like India and Brazil, the IMF predicted this Tuesday.
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The update of the outlook for the world economy includes few changes compared to the previous one, published in January.
“Certainly There are differences from one region to another, but despite pessimistic forecasts, the economy is resilient and inflation is close to the target.“, the chief economist of the International Monetary Fund, Pierre-Olivier Gourinchas, told reporters.
“The road has been bumpy,” due to problems in the supply chain, a war in Ukraine that triggered an energy and food crisis and a rise in inflation, followed by an increase in interest rates, explains the IMF.
But “despite many gloomy predictions, the world avoided recession,” he adds.
And despite high rates and inflation that varies from one country to another (close to the target in Europe, low in China but still too high in the United States), The global economy is not faltering, thanks in part to solid employment and consumption.
America’s Strength
This is the case of the world’s largest economy, the United States, which will grow 2.7% this year, compared to the 2.1% anticipated three months ago.
“We have seen a considerable increase in both employment and productivity, strong consumer demand and public spending,” Gourinchas explained.
This trend It is not reflected in the other advanced economies, particularly in the euro zone, where already weak growth has been revised slightly downwards to 0.8%. (-0.1 percentage points, pp) due to the fragility of the two main economies in the region: Germany and France.
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Spain is one of the few exceptions, with an increase of 0.4 pp, up to 1.9%.
Among emerging economies, India and Brazil are the luckiest.
Domestic demand and the increase in the economically active population boost India among the fastest growing countries in the world: 6.8%.
Growth in Brazil (2.2%, +0.5 pp over the previous forecast) would be lower than in 2023due to the effects of monetary adjustment and ongoing budget consolidation, but improves on the January figure.
On the contrary, the Mexican economy fell 0.3 pp to 2.4%, among others due to a contraction in the manufacturing sector.
The IMF’s economic forecasts for the rest of the region this year vary considerably: Bolivia will grow 1.6%, Colombia 1.1% (previously 1.3%), Ecuador 0.1%, Paraguay 3.8%, Peru 2.5%, Uruguay 3.7% and Venezuela 4%. Central America will progress by 3.9% and the Caribbean by 9.7%.
For Argentina, the financial organization maintains its January forecast: GDP will contract 2.8% this year amid the fiscal adjustment carried out by the government of ultraliberal president Javier Milei, in an attempt to restore macroeconomic stability.
The forecast for Argentine inflation is just as dismal. The organization projects that it will touch 250% this year and drop to almost 60% in 2025.
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Chinese weakness
Nor do the forecasts for China change, with an expected growth of 4.6% this year, a sign that the slowdown in its economy continues.
“LThe weaknesses observed since last year are persistent. There are some concerns due to low domestic consumption and we should expect activity to remain moderate for some time,” Gourinchas stressed.
As in 2023, the Russian economy remains solid this year with a projected expansion of 3.2% (+0.6 pp over January) despite international sanctions. Russia keeps its machinery oiled due to public investment in military spending to finance the war in Ukraine.
The IMF’s optimism is short-term. For the future, global forecasts are not buoyant.
The outlook is “below the historical annual average” from 2000 to 2019 of 3.8%,” which reflects “restrictive monetary policies and withdrawals of fiscal support, as well as low underlying productivity,” reads the report known as WEO (World Economic Outlook), which the IMF disseminates at the beginning of its meetings this week in Washington.
Already In the medium term, in production and trade, the forecasts continue to be the “lowest in decades.”
