The IMF recently released an update on world economic outlook growth projections, which continued to reflect significant differences between developed, developing and emerging markets. Even though the UK recently surprised on the upside, with growth of 0.6% in the first three months of 2024, there are still challenges ahead.


Economic forecasts


The latest economic forecasts from the IMF were released in April 2024 and certainly make for interesting reading.


Global output


It's also interesting to take a more general approach to economic forecasting before we delve deep into developed, developing and emerging markets. In 2023, the world economy grew by 3.2% (as measured by GDP growth), with a similar performance expected in 2024 and 2025. Yes, the IMF believes that the global economy will show zero growth over the next two years.


Advanced economies


As expected, advanced economies will be starting from a relatively low base over the next two years. After growth of 1.6% in 2023, this is expected to increase marginally to 1.7% in 2024 and 1.8% in 2025. If we drill a little deeper, you will see that:-


· After hitting 2.5% in 2023, the United States is expected to show growth of 2.7% this year, falling to just 1.9% next year.

· The UK's growth is more mixed, registering just 0.1% in 2023 but expected to increase to 0.5% in 2024 and 1.5% in 2025.

· The Euro Area experienced growth of 0.4% in 2023, which is expected to rise to 0.8% in 2024 and 1.5% in 2025.

· Interestingly, Spain registered growth of 2.5% in 2023, which is expected to fall to 1.9% in 2024 and increase to 2.1% the following year.

· Japan (a hot topic at the moment) saw economic growth of 1.9% in 2023, which is expected to fall to 0.9% this year and then rise slightly to 1% in 2025.


The average for other advanced economies shows growth of 1.8% in 2023, expected to increase to 2.0% this year and 2.4% next year.


Emerging markets and developing economies


The difference between emerging markets/developing economies and so-called “advanced economies” is akin to night and day at the moment. Overall, emerging markets and developing economies recorded growth of 4.3% in 2023, which is expected to drop slightly to 4.2% in 2024 and 2025.


Looking specifically at emerging and developing economies in Asia, we see that:-


· Average growth is predicted to fall to 5.2% this year, from 5.6% last year, and then fall again to 4.9% in 2025.

· The Chinese economy grew 5.2% last year, but growth is forecast to drop to 4.6% this year and 4.1% in 2025.

· The powerhouse that is India recorded growth of 7.8% last year, which will fall to 6.8% this year and 6.5% next year.


It's essential to compare and contrast the different types of economies in other areas of the world. The following figures give an idea of expected economic growth elsewhere:-


· Emerging and developing economies in Europe saw 3.2% last year, but this is predicted to fall to 3.1% this year and 2.8% in 2025.

· Latin America and the Caribbean will see a fall to 2.0% this year, from 2.3% last year, and an increase to 2.5% in 2025.

· Middle Eastern and Central Asian economies will register significant growth, from 2.0% last year to 2.8% this year and 4.2% next year.

· Sub-Saharan African economies are also on a growth path, recording 3.4% growth last year, which is expected to rise to 3.8% this year and 4.0% next year.

· Emerging market and middle-income economies will see a slight reduction in growth from 4.4% in 2023 down to 4.1% in 2024 and the same again in 2025.

· Low-income developing countries are expected to grow significantly, rising from 4.0% last year to 4.7% this year and 5.2% next year.


In light of the recent stronger-than-expected UK economic figures, the IMF has since increased the forecast for 2024 from 0.5% to 0.7%.




The expected strength in emerging markets and developing economies compared to their advanced counterparts is expected to continue for the next couple of years. While the UK and the US continue to fight inflation, with the recent UK figure slightly stronger than expected, we still await the much-anticipated reduction in base rates.

Back to News