International Monetary Fund: Modest Growth Over the Next Two Years

International Monetary Fund: Modest Growth Over the Next Two Years

Good news, worth sharing. Bad news, you already know.

I really have no idea why people prefer to read bad news and tell the world versus reading about good news and treating it as if nothing happened. Ask any business owner or working professional and they will tell you all the issues with their business and how they are underpaid in their company but at the same time, we kept seeing car sales going up.

The luxury brands which are usually bought by the business owners and the mass market brands which could have been purchased by most typical working professionals. So, for bad news, I let you read elsewhere. Let me share some good news which came from the International Monetary Fund (IMF)

Article in theedgemalaysia.com The global economy is set for modest growth over the next two years amid cooling activity in the US, a bottoming-out in Europe and stronger consumption and exports for China, but risks to the path abound, the International Monetary Fund said on Tuesday.

The IMF warned in an update to its World Economic Outlook (WEO) that momentum in the fight against inflation is slowing, which could further delay an easing of interest rates and keep up strong dollar pressure on developing economies.

The IMF kept its 2024 global real gross domestic product growth forecast unchanged from April at 3.2% and raised its 2025 forecast by 0.1 percentage point to 3.3%. The forecasts fail to shift growth from the lackluster levels that IMF managing director Kristalina Georgieva has warned would lead to “the tepid twenties.” Here’s the full report with a lot more numbers:

The IMF significantly hiked its China growth forecast to 5.0% — matching the Chinese government’s target for the year — from 4.6% in April due to a first-quarter rebound in private consumption and strong exports. The IMF also boosted its 2025 China growth forecast to 4.5% from 4.1% in April. Article in theedgemalaysia.com

China is always in the picture. Fight against inflation slowing.

China is not just the engine of the world or the manufacturing capital. China has over 1,4 billion population which could provide countries in South East Asia such as Malaysia with a lot of potential tertiary education students, buyers of properties and even tourist spendings. This is why it is always important to know if China is still growing because when China sneezes, many countries with a huge bilateral trade with China will catch a cold.

Meanwhile fight against inflation is slowing. This meant that supply has finally caught up with the sudden demand right after the COVID lockdowns. If inflation could stay low, then many central banks will prefer to keep the rates as it is to support loan growth. This is supposed to be good as it will spur economic activities which will in turn drive the economic growth further too. This was also the reason why our Bank Negara Malaysia has also decided not to touch the Overnight Policy Rate just last week. Read here: Interest Rate Latest News. Everyone gets the same!

Best wishes to all of us.

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