In its latest World Economic Outlook (WEO) report released on Tuesday, the Washington-based global lender also projected a reduction in inflation and unemployment in the country.
The IMF forecast the consumer price index (CPI) at 24.8pc and 12.7pc for the current and next fiscal year, respectively. The unemployment rate may drop to 7.5 in the next fiscal year as compared to the 2024 forecast of 8.0pc, the report stated. Meanwhile, the international lender raised its outlook for the global economy this year, while maintaining a gloomy forecast over the medium term.
The International Monetary Fund now expects the world economy to grow by 3.2 percent this year, up 0.1 percentage point from its previous forecast in January, and by a further 3.2 percent in 2025.
Global headline inflation is expected to ease from 5.9 percent this year to 4.5 percent in 2025, supported by elevated interest rates in many countries.
“The global economy continues to display remarkable resilience, with growth holding steady and inflation declining,” IMF chief economist Pierre-Olivier Gourinchas told reporters on Tuesday. “But many challenges still lie ahead.”
“Most indicators continue to point to a soft landing,” he said, referring to attempts by many central bankers to bring inflation down to target without fueling unemployment or hampering economic growth.
The WEO’s publication comes as global financial leaders gather in Washington this week for a series of semi-annual meetings hosted by the IMF and World Bank.
world’s Most Indebted Nations
Assistance for the world’s most indebted nations and climate change top the agenda for those meetings.
The differences among the world’s advanced economies are stark: The IMF now expects growth in the United States to hit 2.7 percent this year up 0.6 percentage points from the January forecast marking an acceleration from the 2.5 percent growth recorded in 2023.
Growth in the world’s largest economy is then expected to slow to 1.9 percent in 2025, slightly higher than previously expected.
In contrast, the euro area is now expected to grow by just 0.8 percent in 2024 down 0.1 percentage point from January and only slightly above last year’s tepid 0.4 percent expansion before picking up to 1.5 percent in 2025.
The outlook for the United Kingdom and Canada this year has also been revised lower, while Japan’s 2024 growth forecast was unchanged.