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Momentum in economies including the United States and India has accelerated in recent months, helping to fuel optimism that global growth in 2024 will slightly exceed that of last year, according to a Financial Times study .
The indicator of the performance of the American economy, taking into account measures of confidence, financial markets and real activity, has returned to its highest levels since mid-2022, offering a positive point in a context largely lackluster global economy.
India has seen a similar recovery, according to the latest edition of the biannual Brookings-FT Tracking Index of Global Economic Recovery, or Tiger.
The figures come as policymakers prepare to gather in Washington this week for the spring meetings of the IMF and World Bank.
Ahead of the meetings, the IMF warned of a decade of disappointing growth and a growing risk of popular discontent as central banks continue to battle inflation and governments grapple with high public debt .
Geopolitical risks also weigh heavily on the outlook as economic policymakers prepare to meet in the coming days. These include a worsening situation in the Middle East, after Iran launched a barrage of drones and missiles at Israel in retaliation for a suspected Israeli strike in Damascus.
The fund, led by Kristalina Georgieva, who has just won a second term as managing director, will publish updated economic forecasts next week.
These are expected to show firmer growth than in the IMF’s previous World Economic Outlook update in January, which suggested that global gross domestic product growth would remain at 3.1 percent in 2024 and not would increase only gradually to reach 3.2 percent next year.
Eswar Prasad, a senior fellow at the Brookings Institution, said the Tiger index readings offered “positive omens” for a modest recovery in global growth this year compared to 2023, with the United States emerging as the main driver of this modest improvement in global growth. economic perspective.
Despite the Federal Reserve’s string of interest rate hikes aimed at curbing inflation, the U.S. economy is “moving forward” and a recession, even a mild one, seems unlikely, Prasad said.
“The United States continues to surprise everyone,” he said. It has proven “remarkably resilient, with a hot labor market and rising stock prices fueling strong business and consumer confidence, in turn boosting domestic demand.”
The strength of the US economy, combined with stubborn inflation, has dampened speculation that the Fed would be able to cut interest rates as early as June. This led to a broader rethink of when other major central banks would be willing to reduce their restrictive monetary policy.
India and Japan also emerge from the Tiger analysis with rising growth indicators, while major European economies, including Germany and the United Kingdom, remain in poor economic health.
“The global economic recovery is being held back by geopolitical conflicts, protectionist policies and persistent inflation,” Prasad said.
China is “still flirting with deflation,” he added, with confidence indicators at low levels. Prasad warned that China and Germany appeared to be counting on stronger external demand to support their growth, which risks hampering the recovery and stoking trade tensions.
The Tiger analysis compares indicators of real activity, financial markets and confidence with their historical averages, for both advanced and emerging economies.
