The International Monetary Fund (IMF) released an updated version of its World Economic Outlook report on August 8, slightly lowering its forecast for global economic growth this year while raising its growth forecast for China to 4.6%.
The IMF predicts that the world economy will grow by 3% in 2026, which is 0.1 percentage points lower than the April forecast. This marks the second time the IMF has lowered its forecast for global economic growth this year, following a previous reduction of 0.2 percentage points in April. The IMF states that this reduction reflects the impact of the conflict in the Middle East, but that the accelerated growth in the global technology sector driven by demand, thanks to advancements and applications in artificial intelligence, has partially offset the negative effects of the conflict.
According to the IMF, the current risks of a downturn in the world economy remain significant. There is still a possibility of renewed escalation in geopolitical tensions, which could exacerbate product price volatility, further threaten supply chain security, drive up inflation, and negatively impact the financial environment. However, if the resumption of shipping through the Strait of Hormuz goes more smoothly than expected, and product price increases are lower than anticipated, economic growth could be stronger than expected.
According to the IMF’s latest projections, developed economies, emerging markets, and developing economies are expected to grow by 1.7% and 3.8%, respectively, this year. Both rates are 0.1 percentage points lower than previously anticipated. Specifically, the IMF has lowered its growth forecasts for the Middle East and Central Asia by 1.2 percentage points to 0.7%, the Eurozone by 0.2 percentage points to reach 0.9%, the United States remains unchanged at 2.3%, and China has been raised by 0.2 points to 4.6%.
Against the backdrop of a general decline in global economic growth expectations, China is one of the few major economies whose growth expectations have been raised. According to the IMF report, China’s economic performance has exceeded expectations, primarily due to the strong performance of its high-tech manufacturing sector, which has, in turn, significantly boosted the economy through related exports.
The updated report also indicates that the global overall inflation rate will rise from 4.1% last year to 4.7% this year, before returning to 3.9% by 2027. The IMF notes that the primary drivers of price increases this year are energy and food prices, and that inflation patterns are expected to remain uneven across different countries.
Furthermore, the growth rate of global trade is projected to slow from 5% last year to 3.5% this year, before recovering to 4.3% by 2027. (Outlook New Era)
Edit：Zeng Mengqi Responsible editor：Li Yi
Source：XinhuaNet
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