The International Monetary Fund (IMF) published its update of the global economic outlook for 2024.
The document points out that despite the pessimistic forecasts at the beginning of the year, the global economy has remained resilient with sustainable growth and inflation that has a downward trend.
This after having experienced disruptions in post-pandemic supply chains, a food and energy crisis derived from the war between Russia and Ukraine, and a significant increase in consumer prices followed by restrictive monetary policies at a global level.
The main growth forecasts have been revised upwards while those for inflation have been revised downwards. Global growth reached its bottom at the end of 2022 when an annual expansion of 2.3 percent was recorded with an inflation rate of 9.4 percent. The IMF predicts that this year the economy will grow 3.2 percent with inflation of 2.8 percent.
Resilient growth has occurred despite a restrictive monetary policy that has caused a decrease in inflation. This has improved supply chain trade channels through a decrease in energy costs.
Likewise, increases in migratory flows are boosting labor supply in developed countries. An important advantage is fixed mortgage rates that have mitigated the adverse effects of further increases in interest rates.
The priority, according to the IMF, should be to consolidate the convergence of inflation towards its target. Although the inflation trend remains downward, recent episodes have caused a resurgence in inflation related to the increase in crude oil prices. Likewise, it is important to differentiate the evolution of economies in the world.
Robust economic growth is observed in the United States due to increases in productivity and employment. The euro zone is expected to grow, but at very low levels of comparison. Wage increases could hurt inflation in the short term. The Chinese economy is in trouble because of its real estate sector. Domestic demand is weak and global trade conflicts are hurting its growth.
For Mexico, a growth rate of 2.4 percent is expected, below the 2.7 expected for the US. The IMF previously expected an expansion in the country of 2.7 percent.
This is due to the weakness of the manufacturing sector and the contraction of the economy towards the end of 2023. For 2025, growth of 1.4 percent is expected as a result of fiscal consolidation that will result in a large fiscal deficit this year.
