## EXECUTIVE SUMMARY

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**Canonical URL:** [EXECUTIVE SUMMARY](https://www.imf.org/-/media/files/publications/weo/2024/april/english/execsum.pdf)

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### Economic resilience and drivers
- Economic activity was surprisingly resilient through the global disinflation of 2022–23.
- As global inflation descended from its mid-2022 peak, economic activity grew steadily, defying warnings of stagflation and global recession.
- Factors supporting resilience:
  - Growth in employment and incomes held steady.
  - Supportive demand developments, including greater-than-expected government spending and household consumption.
  - A supply-side expansion amid an unanticipated boost to labor force participation.
  - Ability of households in major advanced economies to draw on substantial savings accumulated during the pandemic.
  - Changes in mortgage and housing markets over the prepandemic decade of low interest rates moderated the near-term impact of policy rate hikes.

### Growth and inflation projections
- Global growth:
  - Estimated at 3.2 percent in 2023.
  - Projected to continue at the same pace in 2024 and 2025.
  - The forecast for 2024 is revised up by 0.1 percentage point from the January 2024 World Economic Outlook (WEO) Update.
  - The forecast for 2024 is revised up by 0.3 percentage point from the October 2023 WEO.
  - The latest forecast for global growth five years from now—at 3.1 percent—is at its lowest in decades.
- Inflation:
  - Global headline inflation is expected to fall from an annual average of 6.8 percent in 2023 to 5.9 percent in 2024 and 4.5 percent in 2025.
  - Advanced economies are expected to return to their inflation targets sooner than emerging market and developing economies.
- Structural and medium-term constraints:
  - Pace of expansion is low by historical standards owing to near-term factors (still-high borrowing costs and withdrawal of fiscal support) and longer-term effects (COVID-19 pandemic, Russia’s invasion of Ukraine).
  - Weak growth in productivity and increasing geoeconomic fragmentation are additional drags.
  - Relatively weak medium-term outlook reflects lower growth in GDP per person stemming from persistent structural frictions preventing capital and labor from moving to productive firms.
  - Dimmer prospects for growth in China and other large emerging market economies will weigh on trading partners.

### Risks to the global outlook
- Risks are broadly balanced.
- Downside risks include:
  - New price spikes stemming from geopolitical tensions, including those from the war in Ukraine and the conflict in Gaza and Israel.
  - Persistent core inflation where labor markets are still tight, raising interest rate expectations and reducing asset prices.
  - A divergence in disinflation speeds among major economies causing currency movements that put financial sectors under pressure.
  - High interest rates having greater cooling effects as fixed-rate mortgages reset and households contend with high debt, causing financial stress.
  - In China, without a comprehensive response to the troubled property sector, growth could falter, hurting trading partners.
  - Amid high government debt in many economies, a disruptive turn to tax hikes and spending cuts could weaken activity, erode confidence, and sap support for reform and spending to reduce risks from climate change.
  - Intensified geoeconomic fragmentation with higher barriers to the flow of goods, capital, and people implying a supply-side slowdown.
- Upside possibilities include:
  - Looser fiscal policy than assumed could raise economic activity in the short term, though risking more costly policy adjustment later on.
  - Inflation could fall faster than expected amid further gains in labor force participation, allowing central banks to bring easing plans forward.
  - Artificial intelligence and stronger structural reforms than anticipated could spur productivity.

### Policy priorities and recommendations
- Near-term priority for central banks as the global economy approaches a soft landing:
  - Ensure that inflation touches down smoothly, by neither easing policies prematurely nor delaying too long and causing target undershoots.
- Fiscal policy:
  - As central banks take a less restrictive stance, renewed focus on implementing medium-term fiscal consolidation is needed to rebuild room for budgetary maneuver and priority investments, and to ensure debt sustainability.
  - Cross-country differences call for tailored policy responses.
- Structural policy:
  - Intensifying supply-enhancing reforms would facilitate inflation and debt reduction, allow economies to increase growth toward the higher prepandemic era average, and accelerate convergence toward higher income levels.
- Multilateral cooperation:
  - Needed to limit the costs and risks of geoeconomic fragmentation and climate change, speed the transition to green energy, and facilitate debt restructuring.

*International Monetary Fund | April 2024*

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_Source: https://www.imf.org/-/media/files/publications/weo/2024/april/english/execsum.pdf_