The International Monetary Fund said it is optimistic about China’s consumption recovery in the next few years, but the declining birth rate will still lead to an economic downturn.
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The International Monetary Fund has raised India’s economic forecast for 2024 and warned that economic growth will slow down next year.
India – which the International Monetary Fund has previously called “the world’s fastest-growing major economy” – is expected to grow 7% in 2024, up from the 6.8% forecast in April. This is largely due to improvements in private consumption, especially in rural areas of the country, the report said.
This is a sharp decline from the 8.2% growth rate in the fiscal year from April 2023 to March 2024.
The world’s most populous country will become the world’s second-largest economy by 2075, Goldman Sachs said, and has been attracting investors including tech giants apple arrive Google As the country strives to become a manufacturing powerhouse.
“Asian emerging market economies remain the main engine of the global economy,” said Pierre-Olivier Gurinchas, chief economist of the International Monetary Fund. “Growth for India and China has been revised upward, accounting for almost half of global growth. But the outlook for the next five years remains weak.
expectations for china
IMF predicts China’s economy will grow by 5% this year May forecast. That’s up from its April forecast of 4.6%, but down from a 5.2% expansion in 2023, the International Monetary Fund said on Tuesday.
According to the latest report from the International Monetary Fund, GDP of the world’s second largest economy is expected to slow further to 4.5% in 2025 and fall to 3.3% in 2029. world economic outlook in July.
Gourinchas noted that the optimistic forecast for 2024 is partly due to strong consumer activity and exports in the first quarter of this year.
“China’s economy has grown tremendously over the past 15-20 years, and its growth is generally much less reliant on the external sector than it was 15 or 20 years ago,” he told a conference. press conference.
“The fact that China is also larger means that it has greater influence in the rest of the world. From China’s perspective, the increase in trade surplus may be small, but from the perspective of other countries, the increase in trade surplus is The increase could be significant.
Gurinchas pointed out that these forecasts were made before the release of China’s latest GDP data.
Ahead of Tuesday’s report from the International Monetary Fund, China’s official data showed the economy expanded at an annual rate of 4.7% in the second quarter, below the 5.1% growth expected by economists polled by Reuters.
“They suggest…perhaps problems with China’s growth – particularly consumer confidence and the real estate sector – are still lingering,” Gurinchas warned. “We flagged this in the data as a concern for the Chinese economy. Risk. And that seems to be happening.”
The International Monetary Fund said it was optimistic about a recovery in consumption in the coming years, but falling birth rates would hamper productivity levels and slow the economic slowdown.
Growth in India and China will account for nearly half of global growth this year.
Growth in Europe and the United States
The International Monetary Fund said that global economic growth is expected to grow by 3.2% in 2024, unchanged from its April forecast, and may grow slightly to 3.3% in 2025.
The U.S. economy is expected to edge up slightly to 2.6% this year compared with 2023, slightly lower than the 2.7% forecast in April.
Inflation is slowing in the world’s largest economy It fell to 3% in June from 3.3% in May.
Federal Reserve Chairman Jerome Powell said on Monday that the central bank would not wait until inflation hits 2% before cutting interest rates, adding that a “hard landing” for the economy was unlikely.
“Inflation dynamics, at least in the United States, appear to be moving in the right direction,” Gurinchas said.
“But we’ve seen bumps in the road, and we should expect there may be more to come, and there may be some delay in how quickly and quickly inflation falls now.”
He emphasized that U.S. public debt remains a serious problem.
Eurozone economic growth this year has been revised upward to 0.9%, 0.1 percentage point higher than the April forecast, driven by strong momentum in the services sector and better-than-expected net exports in the first half of 2024.
The International Monetary Fund said the region’s economic growth is expected to rise to 1.5% in 2025 due to higher real wages and higher investment.
Petya Koeva Brooks, deputy director of the International Monetary Fund’s Research Department, said, “Spain is a bright spot in the euro area in terms of this revision. We have raised our forecast for this year to 2.4%.”
“A large part of this revision is due to what we saw in the first quarter of the year, which was a very strong pickup in services, exports and investment.”
Clarification: This article has been updated to reflect that the IMF’s latest forecast for China’s economic growth remains unchanged from May.
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