GLOBAL: IMF Global Outlook Little Changed But Trend Growth “Mediocre”

The updated October IMF forecasts showed little change in global aggregates compared to its expectations in both April and July. Global growth is forecast at 3.2% in 2024 and 2025 with the latter revised down 0.1pp, to be in line with the series average. The IMF warns that the 5-year outlook is “mediocre” and that reforms remain “necessary” to lift it, while policy should “ensure a smooth landing” near-term.

Global growth %

• Global trade in goods and services is still projected to improve to 3.1% this year from 0.8% in 2023 before picking up to 3.4% next year but still well below average. DM export growth was revised down slightly to 2.5% and 2.7% respectively, while EM was revised up around 0.5pp to 4.6%.
• DM economic growth is forecast to be steady at 1.8% this year and next with upward revisions to the US, Spain and UK more than offsetting downward ones to Germany, France and Japan relative to July.
• Total EM growth is little changed at 4.2% in 2024 and 2025. The IMF notes that the growth outlook for the Middle East and Central Asia and Sub-Saharan Africa have been revised down since April due to disruptions to shipping, especially of oil, conflicts, civil unrest and weather events, while emerging Asia was revised higher.
• Average global inflation was revised 0.1pp lower to 5.8% and 4.3% in 2024 and 2025 respectively down from 6.7% in 2023 helped by both DM and EM. It should moderate to 5% by end-2024 and continue to ease to 3.2% by end-2028. It peaked at 8.8% at end-2022.

Global inflation year-end %

Source: MNI - Market News/IMF