In the International Monetary Fund (IMF) report, the growth forecast of the Turkish economy for this year was increased. According to the report, the Turkish economy is expected to grow 3.1% this year and 3.2% next year.
The International Monetary Fund (IMF) updated the World Economic Outlook Report.
In the report published with the title “Slowing Inflation and Stable Growth Paves the Way for a Soft Landing”, it was reported that the global economy, which was estimated to have grown by 3.1% last year, is expected to grow by 3.1% this year, and the growth rate is estimated to be 3.2% next year.
In its report published in October last year, the IMF predicted that the world economy would grow 2.9% in 2024 and 3.2% in 2025.
In the report, it was stated that the US and some major emerging economies showed greater resilience than expected and the financial support in China was effective in the upward revision in the growth forecast.
In the IMF report, it was noted that the forecasts for 2024-2025 remained below the historical average of 3.8% due to the impact of increasing interest rates to combat inflation, withdrawal of fiscal support due to the pressure of high debt on economic activity, and low underlying productivity growth.
Growth forecast increased for the US economy, lowered for the Eurozone
In the report, which also shared the updated economic growth forecasts of the countries, it was stated that the growth expectation for the US economy was increased from 1.5% to 2.1% for 2024, while it was reduced from 1.8% to 1.7% for 2025.
In the report, it was noted that the growth forecast for the Eurozone economy was reduced from 1.2% to 0.9% for this year and from 1.8% to 1.7% for 2025.
The report stated that the growth forecast of Germany, one of Europe’s leading economies, was reduced from 0.9% to 0.5% for this year and from 2% to 1.6% for next year.
It was reported that the growth expectation for the French economy was reduced from 1.3% to 1% for this year and from 1.8% to 1.7% for next year. The report stated that while the growth forecast for the Italian economy was maintained at 0.7% for 2024, it was increased from 1% to 1.1% for the next year.
The report stated that the growth forecast for the Spanish economy was reduced from 1.7% to 1.5% for this year, while it was kept constant at 2.1% for next year. It was noted that the growth expectation of the UK economy was maintained at 0.6% for this year, while it was reduced from 2% to 1.6% for next year.
Upward revision in the growth forecast of the Chinese economy
In the report, it was stated that in the emerging markets and developing country economies group, the growth expectation for the Chinese economy was increased from 4.2% to 4.6% this year, while it was maintained at 4.1% for next year.
The report states that the growth expectations of the Indian economy for this and next year have been increased from 6.3% to 6.5%. It was noted that the growth forecast for the Russian economy was increased from 1.1% to 2.6% for this year and from 1% to 1.1% for next year.
The growth forecast for the Turkish economy this year has been increased
The report stated that the Turkish economy is expected to grow by 3.1% this year and 3.2% next year.
In its forecasts last year, the IMF predicted that the Turkish economy would grow by 3% in 2024 and 3.2% in 2025.
Expectation of a decrease in inflation
The report noted that inflation fell faster than expected in most regions in a period when supply-side problems were resolved and restrictive monetary policies existed, and it was stated that global headline inflation is expected to drop to 5.8% in 2024 and 4.4% in 2025.
The report stated that with the decline in inflation and stable growth, the possibility of a “hard landing” in the global economy decreased and the risks to global economic growth were generally balanced.
The report points out that a faster fall in inflation may lead to a further loosening of financial conditions, and that a looser fiscal policy than necessary and anticipated may temporarily mean higher growth, but carries the risk of a more costly adjustment later on.
Increases in commodity prices due to geopolitical shocks may prolong tight monetary conditions
The report warned that new rises in commodity prices and supply disruptions resulting from geopolitical shocks, including ongoing attacks in the Red Sea, and more persistent inflation could prolong tight monetary conditions. The report also stated that the deepening problems in the real estate sector in China or the destructive turn towards tax increases and spending cuts could also cause disappointments in growth.
In the IMF report, it was stated that successfully managing the decline of inflation towards the target, adjusting monetary policy according to the underlying inflation dynamics, and adapting to a less restrictive stance in cases where wage and price pressures are clearly dispersed are the challenges that policy makers will face in the short term.
Source: Trthaber / Prepared by Irem Yildiz