IMF lifts growth forecast, says global soft landing in sight

The news: The International Monetary Fund has slightly lifted its overall global growth forecast on the back of an improved outlook for the US and China as well as faster-than-expected easing of inflation.

The numbers: In an update to its latest World Economic Outlook, the IMF forecast global growth of 3.1% in 2024, up 0.2 percentage points from its October forecast, while the estimate for 2025 is unchanged at 3.2%. US GDP is now forecast to expand by 2.1% in 2024 versus 1.5% forecast in October, while the world’s second largest economy China is expected to grow by 4.6% in 2024, an upward revision of 0.4 percentage points. Australia’s economy is forecast to slow to 1.4% in 2024 but pick up pace to 2.1% in 2025.

The context: IMF chief economist Pierre-Olivier Gourinchas said the updated outlook showed that a "soft landing" was in sight, but overall growth and global trade still remained lower than the historical average. The global lender stuck with its October forecast for headline inflation of 5.8% for 2024, but has lowered the 2025 forecast to 4.4% from 4.6% in October. It said the improved outlook was supported by stronger private and public spending despite tight monetary conditions, as well as increased labour force participation, mended supply chains and cheaper energy and commodity prices.