The Strategist

IMF raises forecast for global inflation in 2024

10/11/2023 - 09:18

The IMF advised central banks to continue enforcing strict monetary policy and increased its estimate of global inflation to 5.8% for 2024. The fund's researchers reduced their forecast for global GDP growth to 2.9% for the upcoming year after realizing that the world economy is "not gaining momentum".

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The International Monetary Fund (IMF) raised its estimate of global inflation for 2024 and recommended that tight monetary policy be maintained by central banks until long-term pricing pressures begin to ease.

According to the World Economic Outlook study, global consumer prices rise will be 5.8% in 2024 (5.2%) and 6.9% in 2023 (the IMF expected 6.8% three months ago). The IMF predicted that worldwide inflation would reach 8.7% in 2022, the highest level since the mid-1990s.

According to Pierre-Olivier Gourinchas, the chief economist at the IMF, "monetary policy should remain tight in most countries until inflation reaches target levels" (quoted by Bloomberg).

The IMF also pointed out that medium-term prospects for GDP growth are becoming less favorable because of a number of factors, including the breaking up of the world economy into blocs and the tightening of central bank policies. Consequently, the IMF revised down its 2024 prediction for global economic growth from 3% to 2.9%. Global GDP growth in 2023 is expected to be 3% (the forecast has not altered from 3.5 percent in 2022).