The International Monetary Fund (IMF) on Tuesday slashed the growth forecast of the Middle East and Central Asia region by 0.5 per cent for 2024 but revised upward by 0.3 per cent for next year.
The World Economic Outlook by IMF projected region growth to rise from an estimated 2.0 per cent in 2023 to 2.9 per cent in 2024 and 4.2 per cent in 2025.
“The revisions are mainly attributable to Saudi Arabia and reflect temporarily lower oil production in 2024, including from unilateral cuts and cuts in line with an agreement through Opec+, whereas non-oil growth is expected to remain robust,” it said in its latest report on the world economy.
IMF said the global economy will grow at a slightly higher pace this year as it is poised for “a soft landing with inflation declining steadily and growth holding up,” the International Monetary Fund said on Tuesday.
It projected baseline growth of 3.1 per cent for 2024, a 0.2 percentage point upgrade from its October projections, before edging up to 3.2 per cent next year.
However, it projected slower growth in the US, where tight monetary policy is still working through the economy, and in China, where weaker consumption and investment continue to weigh on activity.
In the eurozone area, activity is expected to rebound slightly after a challenging 2023, when high energy prices and tight monetary policy restrict demand. But many other major economies continue to show great resilience, with growth accelerating in Brazil, India, and Southeast Asia’s major economies.
The IMF warned that uncertainties remain and central banks now face two-sided risks. “They must avoid premature easing that would undo many hard-earned credibility gains and lead to a rebound in inflation. But signs of strain are growing in interest rate-sensitive sectors, such as construction, and loan activity have declined markedly. It will be equally important to pivot toward monetary normalization in time, as several emerging markets where inflation is well on the way down have started doing so already,” the IMF said. In its World Economic Outlook’s January edition.
It sees world trade growth at 3.3 per cent in 2024 and 3.6 per cent in 2025, below its historical average of 4.9 per cent. “Rising trade distortions and geoeconomic fragmentation are expected to continue to weigh on the level of global trade. Countries imposed about 3,200 new restrictions on trade in 2022 and about 3,000 in 2023, up from about 1,100 in 2019,” it said, quoting Global Trade Alert data.