Introduction
World Economic Outlook 2024
In its World Economic Outlook Report released on October 22,2024 the International Monetary Fund (IMF) reported that United States of America (USA) will continue to be the growth engine for world economy for the upcoming year 2025.
Further, the report predicted the growth expectations for China at below 4.5% for 2024 and 2025. {IMF'S view on China is without considering Beijing's recently announced fiscal stimulus plan for the country, therefore The Finance plea for a review on forecast regarding China by considering China's fiscal stimulus plan}.
India and Brazil
The report granted a good rating to emerging economies of India and Brazil.The Report projected growth rate of India at 7.0% in 2024 and 6.5% in 2025.
According to the Report, India’s economy in terms of Gross Domestic Product (GDP) is expected to grow at a slower pace of 7% in 2024 against the 8.2% growth marked in 2023.The Report further says GDP growth will fall further to 6.5 per cent in 2025 as demand slows.
On October 4,2024 Honourable Prime Minister of India declared that Indian economy is on a sustained high growth path with robust economic fundamentals as the government takes earnest efforts not only to achieve the top position but also to keep that position in order to keep India a developed nation by 2047.
When reciting Michael Wolf (U.S Researcher) it is reported that Brazil's economy seems to have held up in the second quarter of 2024. Real monthly Gross Domestic Product (GDP) was up 2.1% from the year earlier in May.
Overall Global Economy
Global economy remained resilience during the disinflationary regime. As per the report the continuance of resilience is harmful to world economic output. Even though the IMF predicted global output will expand 3.2%, it is 0.1% point slower than its July estimate. It means the Report considers the overall growth of the global economy is steady at 3.2% in 2024 and 2025. Therefore the report says that the growth of the world economy in current level is inadequate to give nations sufficient resources to mitigate poverty and confront climate change.Therefore world economy needs a relook on economic policy to tackle inflation.
View on Inflation
Inflation had accelerated and were in peaks in mid - 2022. {As per the report 9.4% Year -on-Year in the third quarter of 2022}.
When the world economy recovered from the Covid-19 sponsored recession, it made factories, freight yards ports and business overwhelmed with customer orders and creating shortages, delays and higher prices stimulated inflation.
However, decision of major central banks raising interest rates on borrowing helped to tackle red hot inflation and thereby battle against inflation has been won to a larger extend, even if price pressures exists in some countries.The present report predicts that the inflation will slowdown to 4.3% from in 2025 from 5.8% of 2024.