IMF projects global growth to slow to 2.9% in 2024 amid economic slowdown

livemint.com:

witness a slight decrease in growth from 4.1 percent in 2022 to 4 percent in both 2023 and 2024. The report highlights that global inflation is expected to gradually decrease, declining from 8.7 percent in 2022, to 6.9 percent in 2023, and 5.8 percent in 2024. Tighter monetary policies and lower international commodity prices contribute to this decline.

However, core inflation is projected to decrease at a slower pace, with a return to target inflation not expected until 2025 in most cases. The IMF emphasizes the importance of focusing on monetary policy actions and frameworks to anchor inflation expectations. Effective communication strategies among various stakeholders are also crucial in managing inflation expectations.

The report raises concerns about potential disruptions to global trade in commodities due to increasing worries about geo-economic fragmentation. It highlights the potential impact of such disruptions on commodity prices, economic activity, and the green energy transition. Despite the relative resilience displayed in the global economy, particularly in earlier recovery stages, economic activity still lags behind pre-pandemic levels, especially in emerging market and developing economies, with disparities between regions widening.

Several factors continue to hinder a robust recovery, including the persistent effects of the pandemic, the Ukraine conflict, geo-economic fragmentation, cyclical factors related to monetary policy tightening, withdrawal of fiscal support, and extreme weather events. While the likelihood of a hard landing has decreased, risks to global growth persist. China's property sector crisis and its potential spill-over effects on commodity exporters are of particular concern.