IMF lowers its 2024 global GDP prediction while maintaining its 2023 forecast of 3%

The German economy is anticipated to contract 0.5% in 2023 and expand 0.9% in 2024.

The International Monetary Fund reported on Tuesday that it had maintained its 3% GDP growth prediction for the world economy through 2023 but has reduced it to 2.9% by 2024 by 0.1 percentage points.

The IMF stated in a report that the institute’s growth forecast for advanced nations was unchanged for 2023 and 2024 at 1.5% and 1.4%, respectively.

The fund’s prior estimate, made in July, put 2024 GDP growth at 4.1%, but now expects it to be at 4% for both 2023 and 2024.

The euro area’s projected growth rates are 0.7% in 2023, down 0.2 percentage points, and 1.2% in 2024, down 0.3 percentage points.

Germany is one of the larger economies in the eurozone, with projections for this year and next year’s growth slipping.

The US economy was predicted to grow by the IMF by 2.1% this year and 1.5% the following year, both of which represented increases above the prior prediction.

In contrast to Russia, where these growth rates were 2.2% and 1.1%, China’s GDP is predicted to expand by 5% this year and 4.2% in 2024.

The IMF also reduced its projection for the volume of global trade growth from 3.7% to 3.5% for the following year and from 2% to 0.9% for this year.

Due to “stronger-than-expected domestic demand,” the financial institution increased its growth projections for Turkey.

The prior predictions for the Turkish economy were for growth of 3% and 2.8%, respectively, in 2023 and 2024, respectively.

The IMF increased its prediction for Russia’s GDP this year from 1.5% to 2.2%; however, it decreased the expectation for 2024 from 1.3% to 1.1%.

According to the IMF’s World Economic Outlook report for October 2023, “Even before Russia’s invasion of Ukraine and the inflation surge of 2022, there was little chance of returning to the pre-pandemic path, with expectations of longer-term scarring, particularly for emerging market and developing economies.”

“Economies heavily dependent on Russian energy imports experienced a steeper increase in energy prices and a sharper slowdown,” it stated.

The estimate for India’s economic growth in 2023 was increased from 6.1% to 6.3%, and the estimate for 2024 was left intact at 6.3%.

Additionally, the IMF increased its forecast for UK economic growth from 0.4% to 0.5% for 2023, while it decreased its forecast for 2024 from 1% to 0.6%.