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Navigating Global Economic Outlook: Growth, Inflation, and Risks in 2024

This post delves into the IMF’s latest World Economic Outlook, which presents a cautiously optimistic picture of the global economy in 2024, overshadowed by significant downside risks.

The IMF has nudged up its forecast for global economic growth in 2024, predicting an expansion of 3.2%, a marginal increase of 0.1 percentage points from its January estimate. This upward revision is primarily driven by stronger-than-expected economic activity in the United States and some emerging markets like India. The US economy is now projected to grow by 2.7% in 2024, a significant improvement from the 2.1% forecast earlier. India’s growth outlook has also been revised upwards to 6.8%, up from 6.5%. This positive performance is attributed to robust domestic demand and rising oil exports on the back of climbing global oil prices.

Uneven Growth Across Regions

China’s economic growth is expected to remain subdued at 4.6% in 2024, unchanged from the IMF’s January projections. While the industrial sector has shown some momentum, a weakened real estate sector and declining domestic demand are likely to weigh on overall activity. The IMF also expressed concerns about China’s potential to spark trade tensions with other countries by exporting excess goods.

The Eurozone faces a slightly less optimistic outlook. The IMF downgraded its growth forecast for the region, citing the lagged effects of tighter monetary policy implemented over the past few years to combat inflation, coupled with increased energy costs. These factors are expected to dampen economic activity in the Eurozone.

Inflation Remains a Pressing Issue

Despite the upward revision in growth forecasts, inflation remains a major concern for the IMF. While global consumer prices are projected to decline from the highs witnessed in 2022, they are still expected to remain above central bank targets in several major economies, including the US. The IMF predicts average global consumer prices to increase by 5.9% in 2024 and 4.5% in 2025, slightly higher than their previous estimates.

Geopolitical Risks and US Fiscal Policy

The IMF highlighted several potential risks that could disrupt the global economic recovery. The ongoing war in Ukraine and potential escalation in the Middle East pose significant threats by fuelling inflation and raising interest rate expectations. Additionally, the IMF expressed concerns about China’s real estate woes and worsening global economic fragmentation driven by the US-China strategic competition.

In an unusual critique, the IMF also pointed towards the US’s recent expansionary fiscal policy as a potential risk factor. While acknowledging the positive contribution of US economic performance to global growth, the IMF cautioned that this strategy might be unsustainable in the long run and could contribute to inflationary pressures globally.

Low-Income Countries Lag Behind

The IMF also warned about a concerning underperformance of low-income countries compared with the rest of the world, with the fund cutting its growth estimate for the group. Those countries have experienced higher-than-expected inflation, due to the stronger US dollar, as well as the impact of high food, fuel, and fertilizer costs.

Outlook: A Cautious Path Forward

The global economy appears to be on a path of moderate growth in 2024, bolstered by the performance of the US and some emerging markets. However, the outlook remains fragile, with inflation, geopolitical tensions, and unsustainable fiscal policies posing significant downside risks. Central banks will need to carefully navigate the tightrope between controlling inflation and preventing a sharp slowdown in economic activity. Addressing long-term challenges like global trade tensions and fiscal sustainability will also be crucial for ensuring a more robust and inclusive global economic recovery.


The IMF’s World Economic Outlook paints a nuanced picture of the global economy in 2024. While there are signs of positive momentum, particularly in the US and some emerging markets, significant challenges threaten to derail the recovery. Inflation remains a major concern, and central banks face a delicate balancing act in achieving price stability without stifling economic growth. Geopolitical tensions and unsustainable fiscal policies further complicate the outlook. Addressing these challenges will be critical for ensuring a more robust and inclusive global economic recovery in the years to come.

Disclaimer: This post has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.