IMF Predicts Stable Global Economy, but Risks Remain

The International Monetary Fund (IMF) projects global economic growth to reach 3.2% in 2024, stable or unchanged from last year.

"Despite many gloomy predictions, the world has managed to avoid a recession, the banking system has proven to be quite resilient, and the economies of developing countries have not come to a sudden halt," the IMF stated in its April 2024 World Economic Outlook.

However, the IMF identifies several risks looming over the global economy this year, one of which is geopolitical conflict.

"The conflict in Gaza and Israel could escalate to a wider region. Ongoing attacks in the Red Sea and the war in Ukraine also risk causing supply shocks that trigger surges in food, energy, and transportation prices," said the IMF.

"Geopolitical shocks could complicate the disinflation process and delay central bank policy easing, thus negatively impacting global economic growth," it continued.

The IMF estimates that, should geopolitical shocks occur, low-income countries whose populations struggle to access food and energy would be the hardest hit.

Besides geopolitical factors, the IMF assesses that the global economy this year faces risks from inflation, debt pressure, and a lack of trust in governments in many countries.

"In several countries across various income groups, trust in government, legislatures, and political parties is less than 50 percent," said the IMF.

"Dissatisfaction with state institutions, often rooted in perceptions of government policy failures, can trigger social unrest and contribute to conflict," it continued.