Rédaction Africa Links 24 with Ayodeji Adegboyega
Published on 2024-04-16 18:29:49
The International Monetary Fund (IMF) has made projections for global economic growth and inflation rates for the years 2024 and 2025. The IMF anticipates a continuation of global economic growth and a decline in inflation rates for these coming years. This forecast is based on the IMF’s observation of “surprisingly resilient” economic activity during the global disinflation of 2022 to 2023.
Specifically for Nigeria, the IMF has upgraded the country’s economic growth projection by 0.2 per cent to 3.5 percent in 2024. However, there is a downgrade in the growth forecast for 2025 by -0.4 to 2.5 per cent. The IMF’s latest World Economic Outlook projection now estimates a 3.2 percent global expansion for 2024, a slight increase from the previous projection in January and consistent with the growth pace observed in 2023.
The IMF also maintains the expectation of 3.2 percent growth for 2025, marking the third consecutive year of such growth. The organization attributes the economic slowdown to factors like high borrowing costs, the withdrawal of fiscal support, lingering effects of the COVID-19 pandemic and Russia’s invasion of Ukraine, stagnant productivity growth, and increased geoeconomic fragmentation.
Sub-Saharan Africa is expected to experience a growth uptick from an estimated 3.4 per cent in 2023 to 3.8 per cent in 2024 and 4.0 percent in 2025. This positive trajectory is driven by the resolution of earlier weather shocks and gradual improvement in supply chain disruptions. The IMF notes that growth forecasts for the African region remain stable for 2024 and 2025, with some fluctuations due to specific country situations.
Despite initial concerns about stagflation and recession, the decline in global inflation from its mid-2022 peak has been accompanied by steady economic expansion. Government spending, robust household consumption, increased labor force participation, and rising employment and incomes globally are cited as factors facilitating this growth.
The IMF forecasts a decrease in global headline inflation from an average of 6.8 per cent in 2023 to 5.9 per cent in 2024 and further to 4.5 per cent in 2025. Advanced economies are expected to meet their inflation targets sooner than emerging markets and developing economies. The drivers of declining core inflation include consistent tight monetary policies, moderated labor markets, and diminishing pass-through effects from earlier price declines.
In conclusion, the IMF’s projections indicate a positive outlook for global economic growth and declining inflation rates in the coming years. The organization anticipates stable growth in emerging market and developing economies, with some variations across regions. Despite challenges like the lingering impact of the COVID-19 pandemic and geopolitical tensions, the IMF remains cautiously optimistic about the global economic trajectory.
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