The International Monetary Fund on Tuesday upgraded its economic outlook for the United States this year, while lowering its expectations for growth in Europe and China. It left its forecast for global growth unchanged at a relatively lackluster 3.2 per cent for 2024.
The IMF expects the US economy the world’s largest to expand 2.8 per cent this year, down slightly from 2.9 per cent in 2023 but an improvement on the 2.6 per cent it had forecast for 2024 back in July. Growth in the United States has been led by strong consumer spending, fuelled by healthy gains in inflation-adjusted wages.
Next year, though, the IMF expects the US economy to decelerate to 2.2 per cent growth. With a new presidential administration and Congress in place, the IMF envisions the nation’s job market losing some momentum in 2025 as the government begins seeking to curb huge budget deficits by slowing spending, raising taxes or some combination of both.
The IMF, a 190-nation lending organisation, works to promote economic growth and financial stability and reduce global poverty. In its latest forecast, it expects China’s economic growth to slow from 5.2 per cent last year to 4.8 per cent this year and 4.5 per cent in 2025. The world’s No. 2 economy has been hobbled by a collapse in its housing market and by weak consumer confidence problems only partly offset by strong exports.
The 20 European countries that share the euro currency are collectively expected to eke out 0.8 per cent growth this year, twice the 2023 expansion of 0.4 per cent but a slight downgrade from the 0.9 per cent the IMF had forecast three months ago for 2024. The German economy, hurt by a slump in manufacturing and real estate, isn’t expected to grow at all this year.
