IMF lifts 2024 global growth outlook but lowers Sub-Saharan Africa
TLDR
- IMF raises global economic growth forecast due to faster-than-expected easing of inflation in the US and China.
- Sub-Saharan Africa's growth forecast is downgraded, attributed to subpar growth in Nigeria and South Africa.
- The global economy shows resilience with declining inflation and sustained growth, reducing the likelihood of a global recession.
The International Monetary Fund (IMF) has slightly increased its forecast for global economic growth, raising the outlook for both the United States and China, the world's two largest economies. The adjustment is attributed to a faster-than-expected easing of inflation.
While the IMF's Chief Economist, Pierre-Olivier Gourinchas, mentioned that a "soft landing" appears to be on the horizon, he also noted that overall growth and global trade remain below the historical average.
However, the IMF downgraded its forecast for Sub-Saharan Africa, citing subpar growth in Nigeria and South Africa, the region's largest economies. Gourinchas emphasized the global economy's resilience, with declining inflation and sustained growth, stating that the likelihood of a global recession scenario is currently low.
Key Takeaways
The Fund projects global economic growth to reach 3.1% in 2024, a slight increase of two-tenths of a percentage point from its October forecast. The IMF anticipates unchanged growth of 3.2% in 2025. It's important to note that these figures fall below the historical average of 3.8% observed during the 2000-2019 period. Additionally, global trade is expected to expand by 3.3% in 2024 and 3.6% in 2025, which is notably below the historical average of 4.9%. The IMF attributes this subdued growth in trade to the impact of numerous new trade restrictions, contributing to a slower pace of expansion compared to historical trends.
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