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Updated World Economic Outlook

  • Context (TH): The IMF updated World Economic Outlook showed that a “soft landing” was in sight, but overall growth and global trade remained lower than the historical average.
  • The World Economic Outlook is published by the IMF twice a year.
  • Soft landing means an economic situation where the central bank can raise interest rates just enough to slow the economy and reduce inflation without causing a recession.
  • IMF forecasted global growth of 3.1% in 2024, 0.2 percentage points higher than its October projection yet lower than the average of 3.8% (2000-2019).
  • Global trade was expected to expand by 3.3% in 2024 and 3.6% in 2025, well below the historical average of 4.9%.
  • Headline inflation forecast remains the same at 5.8% for 2024 but lowered the 2025 forecast to 4.4%.
  • IMF forecasts a drop of 2.3% in oil prices against the earlier 0.7%.
  • It has upgraded the outlook for both the United States and China — the two largest economies — and cited faster-than-expected easing of inflation.
  • It is observed that the global economy is far from a global recession.
  • However, risks include geopolitical tensions in West Asia and attacks in the Red Sea that could disrupt commodity prices and supply chains.
  • The improved outlook was supported by stronger private and public spending despite tight monetary conditions, increased labour force participation, mended supply chains and cheaper energy and commodity prices.
  • India’s Growth rate = 6.5% (2024 and 2025), which increased by 0.2 % from the October forecast.
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