Updated World Economic Outlook

Jan 31, 2024

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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.