WASHINGTON: The global growth is expected to remain at the same level in 2024 and 2025, said Pierre-Oliview Gourinchas, Chief Economist and Director, Research Department of the International Monetary Fund (IMF), during a briefing on the World Economic Outlook held as part of the IMF Spring Meetings in Washington, Trend reports.

‘The global economy continues to display remarkable resilience, with growth holding steady and inflation declining, but many challenges are still ahead. Global growth was 3.2% in 2023, and is expected to remain at that level both in 2024 and 2025. This represents a 0.3 percentage point upgrade from October projections for 2024,’ he said.

Gourinchas noted that inflation continues to come down.

‘Median inflation will decline from 4% at the end of last year, to 2.8% by the end of this year, and 2.4% at the end of 2025, and most indicators continue to point to a soft landing. We also project less economic scoring from the crisis of the past four years although estimates vary across coun
tries.

Inflation trends are encouraging but we are not there yet. Somewhat more easily progress towards inflation targets as stalled since the beginning of the year in some countries. This could be a temporary setback, but there are reasons to remain vigilant,’ said the IMF expert.

He went on to add that inflation remains stubbornly high in many countries.

‘Further trade restrictions could also push up goods inflation. Bringing inflation back to target should remain the priority for solid divergences also between countries that call for careful calibration of monetary policy. A key priority is to rebuild fiscal buffers, especially in an environment with high real interest rates, modest growth and elevated debts. Unfortunately, planned fiscal adjustments are often insufficient and could be derailed further given the record number of elections this year,’ added Gourinchas.

He went on to add that reversing the decline in medium term growth for low income countries is also a priority.

‘Structural reforms sho
uld promote domestic and foreign investment and increased fiscal revenues. This will help lower borrowing costs and reduce funding needs. But the potential for serious disruptions in labor and financial markets is high and the right infrastructure and regulations are needed. The global growth prospects are also harmed by rising geo economic fragmentation. Trade linkages are already changing. Some economies could benefit from the reconfiguration of global supply chains. But the net effect may still be a loss of efficiency, making the global economy less more resilient,’ he said.

The IMF representative pointed out that a great achievement of the past few years has been the strengthening of monetary, fiscal and financial policy frameworks, especially for emerging market economies.

‘This has helped make the global financial system more resilient. Going forward, it is essential to preserve these improvements, and that includes protecting the hard-won independence of central banks,’ he added.

The Spring Meetings
of the International Monetary Fund and the World Bank Group kicked off on April 15.

The main ministerial meetings and events will take place April 17-19 with other events and activities taking place during the week, April 15-20.

At the heart of the gathering are meetings of the joint Development Committee and the IMF’s International Monetary and Financial Committee, which discuss progress on the work of the World Bank Group and the IMF.

The Spring Meetings bring together central bankers, ministers of finance and development, parliamentarians, private sector executives, representatives from civil society organizations and academics to discuss issues of global concern, including the world economic outlook, poverty eradication, economic development, and aid effectiveness.

Source: Trend News Agency