• Sunday, March 03, 2024
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BusinessDay

IMF projects ‘soft landing’ for Nigeria, others this year

Julie Kozack, spokesperson of the International Monetary Fund (IMF) has predicted soft landing for the global economy with an expectation of continuous resilience in 2024.

“The global economy is ‘poised for a soft landing,” IMF’s spokesperson said Thursday, at a press briefing in Washington ahead of an upcoming update to the fund’s economic forecasts.

“Last year proved to be more resilient than we had expected,” she said, while adding that it expects that resilience to continue into 2024.

“Our general view on the outlook is that we are poised for a soft landing in the global economy,” Kozack said.

She predicted that inflation around the world will continue to subside without causing a damaging recession.

“In October, the IMF predicted that global growth would reach 3.0 percent in 2023, a slight upgrade on forecasts earlier in the year before ticking down slightly to 2.9 percent in 2024.

“The IMF’s growth projections are low by historical standards, underscoring the challenges faced by the global economy as it continues its recovery from the Covid-19 pandemic, which wrought economic damage to many countries around the world.

“One of the challenges facing the fund is the uneven pace of recovery from the pandemic,” she said. “Low-income countries in particular are at risk of falling further behind.”

“They are having the hardest time recovering from the series of shocks, including the pandemic, the food and oil price shock,” Kozack said, adding that the IMF was focused on how to help the most vulnerable members of our global community.

Peterson Institute for International Economics(PIIE) had earlier said after growing 3.4 percent in 2022, the global economy is projected to expand 3 percent in 2023 and 2.8 percent in 2024.

“A soft landing in most countries is likely but not assured,” it said.

“While inflation appears to be receding in most countries, it remains decidedly above central bank targets,” Peterson Institute for International Economics Fall 2023 Global Economic Prospects stated.

It stated that as a result, most central banks will need to keep their policy rates high over the coming year, with the resulting tight financial conditions holding back demand and slowing economic activity.

“However, the available information suggests that most countries will experience below-trend-but-positive growth as inflation moderates, not recessions,” PIIE said.

The institute said most other large economies will see different degrees of subdued growth in 2024.

It cited an example of the United States, saying “as in the United States, restrictive financial conditions will hold back economic activity in the euro area and the United Kingdom, with the latter having recently entered a mild recession.

“On a year-over-year basis, UK real GDP growth is projected to decline 0.3 percent in 2023 and 0.2 percent in 2024,” it said. “European growth may pick up a bit in 2024, but the recovery there remains fragile.”

PIIE projects euro area real GDP growth to be 0.6 percent in 2023 and 1 percent in 2024.