The International Monetary Fund last week released in Washington the July update of the World Economic Outlook, its flagship publication. This year’s global growth projections are unchanged, at 3.2 percent, with a slight increase to 3.3 percent for 2025.
Asia’s emerging market economies “remain the main engine for the global economy,” with China and India projected to contribute together almost half of global growth. By contrast, the projection for the advanced economies, including the United States, the Euro Area, Japan, the United Kingdom and Canada, is 1.7 percent in 2024 and 1.8 percent in 2025. In Latin America and the Caribbean growth is projected to slow down this year to 1.9 percent, with a slight increase to 2.7 percent in 2025.
World Economic Outlook Update, July 2024: The Global Economy in a Sticky Spot (imf.org)
The risks to this year’s outlook are identified as emanating from persistent inflation in the services sector and from price pressures generated by increased trade and geopolitical tensions. The risks from incessant price increases in the services sector may require “higher-for-even-longer interest rates.” Also, an escalation of trade tensions can lead to increased tariffs and protectionist industrial policies.
