IMF Raises Global Inflation Forecast for 2024

IMF Raises Global Inflation Forecast for 2024

The International Monetary Fund (IMF) revised its global inflation forecast for next year and called on central banks to maintain tight policy until there is a sustained easing of price pressures.

The IMF raised its forecast for global consumer price growth to 5.8 per cent for next year in its World Economic Outlook released on Tuesday. Bloomberg reports that the IMF published a previous projection three months ago, predicting inflation of 5.2 per cent, and has since reduced the forecast of economic growth in 2024.

In its latest world economic forecast, which was created before the Hamas attack on Israel and the start of the war, the IMF stated that it expects global economic growth of three per cent this year, which is in line with the previous forecast since growth in the US is stronger than expected. And offsets the decline in the outlook for the EU and China.

Regarding the forecast of global economic growth in 2024, the IMF reduced the forecast by 0.1 per cent to 2.9 per cent, reports CNN.

Stronger Growth Expected in The US

The Eurozone should achieve a collective growth of 0.7 per cent this year and 1.2 per cent next year. This is a drop of 0.2 and 0.3 per cent, respectively, compared to the previous forecast from July. The IMF stated that growth in China should be five per cent this year and 4.2 per cent next year, which is 0.2 and 0.3 per cent less than the previous forecast.

The report warned, however, that the crisis in China’s real estate sector could deepen with global spillovers, especially for commodity exporters. The US should experience stronger growth this year and next. The IMF upgraded its growth forecast for the US economy to 2.1 per cent in 2023 and 1.5 per cent in 2024, an improvement of 0.3 and 0.5 per cent.